Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — Council House Sales

Mr. Knox: asked the Secretary of State for Scotland whether he is satisfied with the progress being made with the sale of council houses to sitting tenants in Scotland.

The Secretary of State for Scotland (Mr. George Younger): Our policy has been popular and successful. Since 1979 about 80,000 public sector tenants in Scotland have expressed an interest in purchasing their home and nearly 40,000 sales have been completed, with many more in the pipeline.
I remain concerned, however, at the time that a small number of authorities are taking to process sales. My Department has written this week to 15 authorities which appear to be taking 12 months or longer to complete sales, drawing attention to the serious consequences of these delays and asking for an early indication of the steps they propose taking to ensure that sales are completed within a reasonable period.

Mr. Knox: Will my right hon. Friend list those authorities that have been dragging their feet on the sale of council houses?

Mr. Younger: I should be glad to list those authorities for my hon. Friend or for any other hon. Member who would like to know them. The time has come for local authorities to realise that a popular policy, and one laid down by the House, should be fulfilled quickly and efficiently by every local authority.

Sir Hector Monro: Does my right hon. Friend agree that his answer represents an outstanding achievement by the Government in carrying out of a policy that is bitterly opposed by the Labour party? When he has been travelling up and down Scotland, has he seen the houses that have been enhanced by private ownership and occupation, and will he do everything possible to encourage sales?

Mr. Younger: I agree with my hon. Friend, and it is interesting to note that all over Scotland a vast number of people are extremely pleased at having the chance to buy their own homes. That satisfaction is matched only by their amazement that the Labour party insists on opposing something that is so clearly in the interests of the people of Scotland.

Mr. Malone: Is my right hon. Friend aware that, in the city of Aberdeen, since the inception of the legislation about 3,000 applications for homes have been lodged, of

which only 800 have been processed? Can he confirm that Aberdeen is one of the district councils to which he has written?

Mr. Younger: I can confirm that Aberdeen is one of the councils to which I have written, and, as there is clearly a strong demand in that city, I hope that the council will acknowledge that and allow its constituents to buy their own homes.

Mr. Hugh Brown: Would the right hon. Gentleman care to come with me to look at some of the deprived areas, which are the other side of the coin, where people cannot afford to buy and the chance to transfer to another area is becoming more difficult? If he does, he will see the hopelessness of that aspect of the policy.

Mr. Younger: I appreciate the hon. Gentleman's genuine and well-informed concern over this issue, but has he reflected on whether the policy of council house sales really is unhelpful? It is positively helpful in two respects. First, it provides money which would not otherwise be available for the refurbishment of houses and means that those who wish to buy their own homes are able to do so. Secondly, those not wishing to buy will remain tenants, and it is they who will get the benefit of the advantages and improvements.

Oral Answers to Questions — Local Authority Manpower

Mr. McQuarrie: asked the Secretary of State for Scotland what has been the total increase in local authority employees in Scotland in the years 1980, 1981, 1982 and what are the latest available figures for 1983.

The Under-Secretary of State for Scotland (Mr. Michael Ancram): The joint manpower watch figures for June 1983—the latest available—are in the Library. They show that for the years from June 1979 to June 1983 annual changes as follows: an increase of 1·6 per cent. followed by decreases of 0·2 per cent., 1·8 per cent., and 1 per cent.

Mr. McQuarrie: I am grateful to my hon. Friend for his remarks. They show that the last Conservative Government at least produced some results, but does my hon. Friend agree that the reductions should be far greater, particularly in education, where in even the smallest of schools the headmasters are provided with private secretaries? Will he take additional action to bring about further reductions?

Mr. Ancram: I agree that the figures, while showing a minor trend in the right direction, leave much to be achieved. It is worth reminding the House that in spite of a reduction of 3,000 in the number of teachers, which has been brought about by the fall in the school population, local authorities employ 5,000 more people than they did in 1977.

Mr. Donald Stewart: Is the Minister aware that although the Government may pat themselves on the back over the reduction in the number of civil servants, this has resulted in a tremendous additional burden on local authorities—particularly in carrying out DHSS work— and that they no longer have the funds to carry even the employees they already have, let alone extra staff?

Mr. Ancram: The right hon. Gentleman should understand that we are looking for manpower reductions


in Scotland. As I have said, the figures for Scotland are still considerably greater than they were under the Labour Government in 1977. I hope that Scottish local authorities will look at the reductions that have been made in England, which have been considerably greater over the past four years, and follow that example.

Oral Answers to Questions — Crown Office Building, Edinburgh

Mr. Maxton: asked the Secretary of State for Scotland on how many occasions in 1983 functions sponsored by his Department have taken place in the Crown Office building in Edinburgh, formerly the Royal high school.

Mr. Younger: Three functions sponsored by Government Departments have been held in the Crown Office buildings this year. One of these, the inaugural meeting of the Scottish Confederation of Tourism, was sponsored by my Department.

Mr. Maxton: Will the Secretary of State take this building back under his complete control, introduce a Bill in the House to provide for a Scottish assembly, and establish it within the next 12 months?

Mr. Younger: In spite of what the hon. Gentleman may think, I detect no sign that anyone in Scotland is interested in having an extra layer of Government, with extra taxes on the Scots to pay for it.

Mr. Canavan: Will the Secretary of State use the former Royal high school building to hold a special meeting of Scottish Members of Parliament to discuss the future government of Scotland? The Tory Government received no mandate from the Scottish people at the recent general election, when over 70 per cent. of Scots voted for candidates who campaigned on the basis of a manifesto containing a commitment to some measure of home rule for Scotland.

Mr. Younger: If it comes to that, the hon. Gentleman's party is miles away from having a mandate from the people of Scotland. At the last election it lost no fewer than 250,000 votes from people who previously supported it. A little decent reticence from the hon. Gentleman in the face of that record would not come amiss.

Mr. Fairbairn: As the building is unused and unnecessary, and as devolution is dead, will my right hon. Friend sell it and put it to proper use, because it is a good building and at present it is being put to no good use?

Mr. Younger: I agree with my hon. and learned Friend that it is a fine building. It is being made good use of by my right hon. and noble Friend the Lord Advocate and his staff. Moreover, it is appreciated by all Scottish Members as being available for sittings of the Scottish Select Committee and the Scottish Grand Committee from time to time.

Mr. Dewar: Will the Secretary of State reconsider his rather blank response on this issue, because there is abundant evidence — it was apparent during the last election and is shown in public opinion polls—that there is a continuing interest in Scotland in devolution, and meetings of the Scottish Grand Committee in Edinburgh, useful though they may be, cannot be a substitute for that

devolution? Is the right hon. Gentleman really saying that his Government are implacably and utterly opposed to any progress on this issue?

Mr. Younger: I welcome the hon. Gentleman to the Front Bench and congratulate him on his appointment. Let me put to him two points on this issue. First, I do not detect any great interest in Scotland for an extra layer of Government, an extra assembly, and extra costs on the people of Scotland to pay for it. He should reflect on that. I ask him, with respect, in his new responsibility, to reflect on the second of my two points, which is that everyone knows that there is a grave division of opinion in his party on the matter and that it is highly unlikely that any future Labour Government would be able to deliver any such thing.

Oral Answers to Questions — Industrial Prospects

Mr. Craigen: asked the Secretary of State for Scotland what proposals he has to improve Scotland's industrial prospects.

The Under-Secretary of State for Scotland (Mr. Allan Stewart): The Government have initiated a wide range of proposals to improve Scotland's industrial prospects. Although a number of serious problems remain, the indications are that the measures are having considerable success.

Mr. Craigen: I wish the Minister would say where these successes are. With his experience as director of the CBI in Scotland, will he tell us why Scotland continues to lag behind in terms of business confidence in the latest CBI trends? Bearing in mind the message from Aviemore about the inability of the new technology in Scotland to provide many jobs, where do the Government see future jobs for Scotland?

Mr. Stewart: There has been a marked improvement in the underlying trend in unemployment. The number of vacancies has also improved. I assure the hon. Gentleman that my experience before coming to the House taught me to read all the questions and answers in the CBI's industrial trend surveys. The most recent survey suggests that investment intentions are substantially up on last year. The results on prices and cost show that inflationary pressures are down, both of which are of the greatest importance for the prosperity of Scottish industry in the medium and long term.

Mr. Henderson: In considering Government policy in this respect, will my hon. Friend give more emphasis to the part that service industries can play in job creation and place less emphasis on narrow geographical lines, because the accident of geography results in some firms getting more help than others?

Mr. Stewart: My hon. Friend will know that the Government are reviewing regional policy. I assure him that we are fully aware of the importance of service industries, which, as he will know, account for more jobs in the Scottish economy than manufacturing industry.

Mr. Kennedy: May I direct the Minister's attention to Scottish indigenous traditional industries and ask when the Government will review their scandalous policy on the Forestry Commission in Scotland, which is being forced to sell more and more of its holdings, such as Glenelg and Glen Affric in recent weeks, because that can result only


in increased unemployment and a loss of what should be a traditional concern and a basic reserve for the Scottish economy? When will the Government change that scandalous approach?

Mr. Stewart: I totally disagree with the hon. Gentleman's analysis on forestry. We are fully aware of the importance not only of forestry itself but of using the products of Scotland's forests for industry.

Mr. Hirst: Does my hon. Friend agree that yesterday's CBI survey showed that profitability in Scottish firms is increasing? Does he welcome that as a sign of future life blood for new investment?

Mr. Stewart: My hon. Friend is right. The survey pointed to increased confidence among Scottish industrialists on the export and investment fronts, both of which are fundamental to recovery.

Mr. James Hamilton: Will the Minister recognise that his statement is not in accord with those being made by industrialists in Lanarkshire, where there are massive redundancies every other week? Will he accept, for a change, the proposal in the booklet that was sent out by the Roman Catholic bishops of Scotland, entitled "Work and Employment", that we should embark on a programme of public expenditure? Is not the time ripe for the Secretary of State for Scotland to go to the Cabinet and for once fight for Scotland and jobs?

Mr. Stewart: My right hon. Friend fights for Scotland and for Scottish jobs with immense effectiveness, if I may say so.

Oral Answers to Questions — Serpell Report

Mr. Tom Clarke: asked the Secretary of State for Scotland if he will make a statement on the implications of the Serpell report for Scotland.

Mr. Younger: The Serpell report gave rise to a wide public debate in Scotland, as elsewhere, about the future of the railways. Having listened carefully to that debate, my right hon. Friend the Secretary of State for Transport has given the chairman of the Railways Board a clear statement of the objectives the Government wish him to pursue. The chairman's guiding objective is to run an efficient railway providing good value for money. That is in the interests of Scotland as of the rest of the country.

Mr. Clarke: Does the right hon. Gentleman agree that it is time to end the haemorrhage of job losses in the railway industry in Scotland as elsewhere? Does he agree that it is time for reinvestment and electrification, and, further, that it is time to make the railway services an essential part of an expanding Scottish industry?

Mr. Younger: I appreciate half of what the hon. Gentleman says, but the overriding objective of the chairman of the British Railways Board must be to run an efficient and effective railway for its customers. In that regard I am encouraged, first, by the progress that is being made, notably in electrification, which, as the House knows, is beginning on the Ayr to Glasgow line, and, secondly, by the new signalling techniques that are being introduced on Scottish lines.

Mr. Bill Walker: Does my right hon. Friend agree that one of the advantages of the Serpell report is that it has

concentrated attention on the lines north of Glasgow and Edinburgh, and that that is a good thing, as it shows clearly that the line between Perth and Inverness is vital?

Mr. Younger: The Serpell report did us a service in drawing together many views on the railway system. However, as I have stressed before, the Serpell report does not represent Government policy. It is a useful starting point for considering what future policy should be.

Mr. Dalyell: What serious credence should we give to a report that solemnly suggests as an option that the passenger service should terminate at the great megalopolis of Crianlarich?

Mr. Younger: I suspect that the hon. Gentleman knows Crianlarich as well as I do. However, that is a complete distortion of the general purpose of the Serpell report—[Interruption.] Serpell deliberately tried to set out different options. The fact that the hon. Gentleman and I probably do not agree with many of them does not invalidate the exercise.

Mr. Michael Forsyth: Does my right hon. Friend agree that absurdities such as the termination of the line at Crianlarich have arisen because we too often accept that restrictive practices and overmanning in British. Rail should be allowed to continue at the expense of passenger services?

Mr. Younger: I appreciate that point. I cannot stress too strongly—and I hope that all hon. Members agree— that the overriding objective of running a railway is to satisfy the customers.

Mr. Russell Johnston: Is that not exactly the point? Is it not true that in countries such as France there has been considerable investment in the railways and that that has shown a return in that more people are using them? Is it not time that the Scottish Office took a positive attitude towards rail investment?

Mr. Younger: The Scottish Office does take a positive view. There has been considerable investment in the railways in recent years and that investment is continuing. I direct the hon. Gentleman's attention to the most interesting improvements that are now being made in signalling techniques. They can save many jobs in the railway industry, by making it more effective and efficient and so keeping the services going.

Mr. Dewar: Does the Secretary of State not accept that the whole Serpell exercise has done untold damage to the morale of the railway industry in Scotland, and that it is in the interests of Scotland—to use the Secretary of State's phrase—that the present railway network should be preserved? That should be stated in absolute terms by any Secretary of State. I believe that the burden of section 20 payments on Strathclyde region are projected in the coming year to amount to more than £30 million. That is putting an enormous strain on the ability to maintain the sort of railway network that the council wants and the travelling public need. Will the Secretary of State look seriously at that problem and see whether the Scottish Office or the rate support grant settlement can do anything to help?

Mr. Younger: I appreciate the problem outlined in the hon. Gentleman's latter point. Without being in any way unsympathetic to it, I should point out that Strathclyde faces a problem which the rest of us face all the time in


trying to find enough money to do all the things that we would like to do. Of course I shall consider the problem and see what I can do to help. My right hon. Friend and I have made it clear on several occasions that, in the light of the Serpell report, it is not our intention that the board should embark on a programme of major route closures. That applies just as much to Scotland as to anywhere else in the United Kingdom.

Oral Answers to Questions — Youth Unemployment (New Towns)

Mr. Norman Hogg: asked the Secretary of State for Scotland what is the level of youth unemployment in Scotland's new towns; and if he will make a statement.

Mr. Allan Stewart: On 14 July 1983, the latest date for which an analysis by age of unemployed claimants is available, a total of 3,838 young people under the age of 20 years were claiming unemployment benefit in the five jobcentre areas which most closely relate to Scotland's new towns. Our extensive programme of special employment and training measures, most notably the youth training scheme, will continue to help those who are not employed.

Mr. Hogg: Does not that reply confirm that the Government's economic policies have blighted the lives of the young people of Scotland, particularly those in new towns? What policies will the Government introduce to alleviate unemployment and create real jobs, without resorting to the drivel published by the CBI?

Mr. Stewart: The CBI will no doubt take due account of the hon. Gentleman's views. We recognise that rising unemployment has made it increasingly difficult for young people to obtain work. That is why we introduced a comprehensive new youth training scheme in September, which will bring valuable work experience and training opportunities to school leavers in Scotland, whether or not they are in work. In Cumbernauld, about 696 places have been approved under the youth training scheme. The hon. Gentleman would be better employed paying tribute to the employers and others in Cumbernauld who are trying to provide such opportunities for the young.

Mr. Hirst: Does my hon. Friend agree that the recent news of a sizeable expansion in Motorola in the new town of East Kilbride confirms and enhances Scotland's position in electronics? Does my hon. Friend agree also that that is the story that we should be shouting from the rooftops, instead of the gloom and doom uttered by Opposition Members?

Mr. Stewart: My hon. Friend is absolutely right. The Motorola announcement is one among many, thus demonstrating the importance and expansion of the electronics industry in Scotland. I agree with my hon. Friend that it is sad that all that Opposition Members ever seem able to do is to belittle the real achievements of Scottish workers and managers.

Oral Answers to Questions — Rating Reform

Mr. Dewar: asked the Secretary of State for Scotland what plans he has to legislate for the reform of the rating system in Scotland.

Mr. Younger: I hope to introduce legislation before Christmas based on the proposals in the White Paper published on 31 August.

Mr. Dewar: Can the Secretary of State explain why the Conservative party has ratted on its long-standing commitment to abolish domestic rates? Does he really believe that the chief reason is a lack of public support for radical change? If so, I must tell him that I suspect that not one ratepayer in Scotland shares that belief.

Mr. Younger: During the last election we made it very plain, in the clearest print possible, that we did not propose to abolish the rating system. I hope the hon. Gentleman recognises that we made that perfectly clear to the electorate. I am sure the hon. Gentleman will know that, in response to the White Paper, extremely strong objections were raised to all the alternatives to rating. It would be rather foolish to embark on a new system that would be highly unpopular.

Sir Hector Monro: Does my right hon. Friend know that many professional and amateur sports clubs, racecourse and caravan owners are delighted with his enlightened approach to rating reform? Will he press on with legislation as soon as possible?

Mr. Younger: The anomalies in the rating, for example, of sports grounds, racecourses and caravan sites have been drawn to my attention by hon. Members on both sides of the House. We propose to put those anomalies right in the Bill. I hope that most hon. Members will agree that that is very much to be welcomed.

Mr. Wallace: I note the Secretary of State's retreat from the commitment to reform the domestic rating system. Does he agree that the computerisation of PAYE in Scotland makes the implementation of domestic local income tax a much more feasible option? A local income tax would enhance local democracy rather than desecrating it, as was implicit in the White Paper.

Mr. Younger: I have already made clear what we undertook at the last elections as opposed to the mythology expounded by Opposition Members. I appreciate that some people think that a local income tax would be a good idea, but it has been made clear to me that many people think that it would be extraordinarily dangerous to put the right to raise income tax locally, at whatever level was thought fit, into the hands of some of the councils that have irresponsible spending policies.

Oral Answers to Questions — Prisons (Overcrowding)

Mr. McKelvey: asked the Secretary of State for Scotland what steps he is taking to deal with overcrowding in Scottish prisons.

Mr. Ancram: Significant overcrowding in Scottish prisons is currently confined to Edinburgh and Barlinnie prisons and to Longriggend remand unit. We are undertaking a substantial capital building programme to provide additional inmate places.

Mr. McKelvey: Will the Minister accept my congratulations on the fact that he has faced a problem which his predecessor denied ever existed? Is the hon. Gentleman aware that in February 1983 Edinburgh prison housed 795 prisoners, although it has a registered capacity for 550 prisoners? It meant that 156 prisoners had to be housed three to a cell. Does not the hon. Gentleman agree that that is scandalous? Does he accept that the building programme alone will not reduce such overcrowding and that something must be done in the immediate future to alleviate the problem?

Mr. Ancram: I find the hon. Gentleman's remarks about my predecessor rather surprising, because when he took office the capital programme for prisons was under £1 million. It is now £5·8 million and will increase to £10 million over the next three years. In Edinburgh the overcrowding is in part due, as I am sure the hon. Gentleman knows, to the closure of a hall with 80 places while it is being reroofed. Once the work and the other capital programmes of phase 2 in Greenock and Shotts are completed, a large amount of the overcrowding will have been dealt with.

Mr. Fairbairn: Instead of sending to prison, including Saughton prison, those who fail to pay fines, would it not be wiser to introduce alternative methods of sentence or service for the short-term and not serious prisoners who represent approximately 50 per cent. of the daily prison population, to avoid the pointlessness and expense of sending them to prison at all?

Mr. Ancram: I agree with my hon. and learned Friend that we must continually look for alternatives to imprisonment, particularly for minor crimes. The use of community service has increased greatly over the past few years, from fewer than 500 in 1980 to about 1,900 last year. With regard to fine defaulters, we have been conducting an experiment in improved fines enforcement at two Scottish courts.

Dr. Godman: Will the Minister make a detailed statement on the use of Her Majesty's prison, Greenock and say when is it likely to be reopened?

Mr. Ancram: The redevelopment of Greenock prison is programmed for completion by the end of 1984 and, as the hon. Gentleman knows, will provide 180 additional places.

Mr. McQuarrie: When will the £1 million development at Peterhead prison be completed? In view of the recent incidents at the prison, does my hon. Friend intend to give further money for development for easier segregation of inmates?

Mr. Ancram: The development at Peterhead is continuing and will move ahead as fast as it can. Once it has been completed it will not only serve Peterhead prison better but will reduce some of the overcrowding at Barlinnie, which has been caused by one hall at Peterhead being out of Commission.

Mr. O'Neill: Will the Minister give an assurance that when these additional places are ready he will not use that as an opportunity to sustain overcrowding by adopting the sentencing policy which his colleague the Home Secretary appears to think is necessary to appease the vultures at the Tory conference?

Mr. Ancram: That question is typical of the hon. Gentleman. The purpose of my right hon. and learned Friend the Home Secretary's announcement was to create a deterrent that would keep people out of prison. It is the intention of my right hon. Friend the Secretary of State and myself to pursue the fight against crime as much by preventing people from indulging in criminal activities as by punishing them for doing so.

Oral Answers to Questions — Airports

Mr. Colvin: asked the Secretary of State for Scotland what representations he has received with regard

to possible disposals of those airports in Scotland at present owned or managed by the British Airports Authority or the Civil Aviation Authority.

Mr. Younger: I have received no representations about disposal of the BAA airports, and two about disposal of the CAA airports. Disposal of these airports is primarily a matter for my right hon. Friend, the Secretary of State for Transport, with whom I am, of course, fully in touch.

Mr. Colvin: Does my right hon. Friend agree that it would be best if commercial or municipal bodies, or a combination of both, were found to take over the airports, particularly those in the Highlands and Islands? If these airports, or some of them, are required for social purposes, surely they should become the direct responsibility of my right hon. Friend's Department? In view of the Government's commitment to consider the introduction of private capital into the British Airports Authority and to look again at the responsibilities of the Civil Aviation Authority, what representations has he made to my right hon. Friend the Secretary of State for Transport?

Mr. Younger: I am grateful to my hon. Friend for his interest in this matter. He is correct about the social considerations. There are good social reasons for the use of these airports. We recognise that by supplying from my Department a considerable subsidy to help to reduce the costs for those who use the airports. On the possibility of privatisation, I can assure my hon. Friend that if my right hon. Friend the Secretary of State for Transport feels able to proceed towards privatisation in any form he will take into account the social aspect in the conditions of any sale.

Oral Answers to Questions — Tayside (Road Signs)

Mr. Bill Walker: asked the Secretary of State for Scotland if he has any plans to change the tourist-related road signs in Tayside.

Mr. Ancram: My Department is assessing the effectiveness of the experimental road signs for bypassed communities erected near Blackford, Brechin and Dunkeld earlier this year. The future of these signs, and the provision of similar signs for other bypassed communities, will depend on the outcome of the assessment.

Mr. Walker: I thank my hon. Friend for that helpful reply. The signs that are in use in Tayside at the moment are welcomed by the people but there is still a strong feeling that the Scottish Development Department and others do not understand that tourist-related industry means just that. This means not only large mansions but other facilities that are made available to encourage people to make use of the lovely area that I represent, and other areas. This can be done only if the public are told about them. Is it not time that some of the hard-nosed people recognised the facts of life and the need for new signs?

Mr. Ancram: As my hon. Friend knows, three out of the four trial experimental sites are within Tayside. One of the points of having an experiment is to assess the results of the experiment. The results of the interviews that were carried out in August relating to the signs, which should be available towards the end of this year, will be considered not only by my Department but by the Scottish Tourist Board to ensure that hon. Friend's concerns are met.

Mr. David Marshall: As the Forth road bridge has a major influence on tourism in Tayside, is the Minister aware of the disturbing report on the Severn road bridge that was revealed by my hon. Friend the Member for Newport, East (Mr. Hughes) last Friday—

Mr. Speaker: Order. We dealt with that yesterday.

Oral Answers to Questions — Frail and Elderly Persons

Mrs. McCurley: asked the Secretary of State for Scotland whether he is satisfied that the administrative and financial demarcation between central and local government in Scotland provides adequately for the care of the frail elderly.

Mr. John MacKay: My right hon. Friend is satisfied that the present demarcation line between the responsibilities of central and local government is appropriate. We encourage health boards and local authorities to co-operate closely through joint liaison committees and other means, and we are reviewing the effectiveness of these arrangements.

Mrs. McCurley: Does my hon. Friend agree that there appears to be a failure on the part of some joint liaison committees of local authorities and health boards in Scotland to come to properly agreed classifications of the elderly? Is he aware that, when they do not come to properly agreed classifications of the elderly, particularly the frail, confused elderly, the proper provision of low key accommodation for them is hindered?

Mr. MacKay: There are difficulties in the interface between local authorities and health boards, which is why we have encouraged liaison committees and why we encourage co-operation. We are always looking at the areas where co-operation is not quite what it should be. We are encouraging the health boards as much as we can and when I meet the social work people I encourage them. The problems of geriatric care are complex because people can be geriatric either through physical frailty or senile dementia or a combination of both. It is almost impossible to draw hard and fast definitions that would satisfy every case.

Mr. O'Neill: Regardless of the difficulties of drawing up hard and fast definitions, the Minister could do one thing, which he is obliged to do under the Mental Health (Amendment) (Scotland) Act 1983. He is capable of spending money and exercising his discretion to put financial backing behind the social work departments and the housing departments to ensure that this need is adequately met. So far he has not done so.

Mr. MacKay: In each rate support grant settlement since 1979 provision for social work has been increased. I think the hon. Gentleman was asking about the support financing scheme. This year we are spending £2·9 million on the scheme and, as he knows, we are undertaking a review of the scheme to see whether we can make it more attractive to local authorities so that we can make progress in the difficult area of care for the elderly.

Oral Answers to Questions — Council House Sales

Mr. Michael Forsyth: asked the Secretary of State for Scotland whether he has received returns from Stirling district council relating to its progress with council house sales.

Mr. Ancram: Yes. The returns suggest that on 30 June there were about 60 cases in which Stirling district council had failed to meet its statutory duty to issue an offer to sell within two months of receiving an application; and that the council takes on average over 20 months to process sales from application to completion. These figures are clearly unacceptable and my Department wrote to the council on 24 October drawing its attention to the serious consequences of its failure to meet the requirements of the Tenants' Rights Etc. (Scotland) Act 1980, and asking for urgent information on the steps which it proposes taking to process sales more speedily.

Mr. Forsyth: Will my hon. Friend confirm that the returns submitted were inaccurate? In the light of the clear evidence that Stirling is failing to meet its statutory obligations, will he now take action against the council, instead of just sending it letters, so that, particularly the elderly and others who are vulnerable and who are being victimised for ideological reasons, can realise their statutory rights to home ownership?

Mr. Ancram: I am grateful to my hon. Friend for those remarks. The returns from Stirling were inaccurate in that it was reporting sales as completed as soon as the contract had been concluded. The statistics have now been rectified and they are as I pointed them out in my original answer. I take the matter seriously and I am waiting to hear from Stirling district council about what action it proposes to rectify the situation.

Oral Answers to Questions — Housing Improvement Grants

Mr. Speaker: Question No. 13.

Mr. David Marshall: Unlucky for some.

Mr. Hirst: asked the Secretary of State for Scotland what was the total of housing improvement grants disbursed in Scotland in the year ended 31 March 1983; what is the estimate of such grants in the year ending 31 March 1984; and if he will make a statement.

Mr. Ancram: Returns by local authorities show that grants paid by them under the homes improvement grant scheme in 1982–83 provisionally totalled £64 million. The latest returns available from local authorities indicate that they are likely to pay grants to a total value of about £125 million in the current financial year.

Mr. Hirst: I am grateful to my hon. Friend for that reply, which confirms the considerable assistance that the Government have given to home owners, particularly during the period when the rate of grant was temporarily increased to 90 per cent. Does my hon. Friend believe that there may be an inflexibility in the current rules for eligibility in that people who live in a house the rateable value of which is in excess of the threshold do not qualify, albeit that they may be in considerable need? As I understand that a working party is at present reviewing the rules of eligibility, will he give urgent consideration to a relaxation of the rateable value threshold rule, but insist that the income qualification— [HON. MEMBERS: "Too long."]

Mr. Speaker: Order. The hon. Gentleman's supplementary question is getting a bit long.

Mr. Hirst: —but insist that the income qualification directs grants to those most in need?

Mr. Ancram: I am grateful to my hon. Friend for his remarks at the beginning of that supplementary question. The working group's report is now in the hands of my Department. It remains for us to formulate specific proposals for legislation to deal with some of the aspects of it, once we have had a chance to consider them fully, and of course before doing so we shall carry out consultation on them.

Mr. Maclennan: Does the Minister realise that the Government's precipitate and unheralded reduction in the rate of improvement grant has thrown local authorities into utter confusion and has lead to cross-party criticism of the Government's action? Is he aware that it has created an impossible situation for the building industry in Scotland in that it will lead to contracts entered into being incapable of completion? How does he propose to sort out this mess of his own creation?

Mr. Ancram: I completely refute the accusation that there is any mess and I am surprised that the hon. Gentleman was not prepared to comment on the tremendous achievement in his constituency, among others, that has resulted from the enhanced scheme. I remind him that the enhancement to 90 per cent was introduced originally for a period of nine months. That was extended to two years, and in his last Budget the Chancellor of the Exchequer announced that the closing date for the scheme would be 31 March. That was the date that we confirmed.

Mr. Henderson: Is my hon. Friend aware that the enhanced scheme was extremely valuable in improving the quality of the Scottish housing stock? Now that it has ended, will he say whether the percentage grant now available for improvements is more or less than when Labour was last in office?

Mr. Ancram: The percentage grants now available have returned, in the case of the two grants that have been enhanced, to their original levels. I repeat that the Scottish building industry, and those who live in the houses that have been improved, have done very well out of the scheme, a factor that hon. Members in all parts of the House should be prepared to recognise.

Mr. Home Robertson: Is the Minister aware that, while three weeks may be a long time in politics, it is an extremely short time in relation to a housing improvement scheme? Will he explain why he authorised the publication of a report apparently extending the improvement grants scheme at the beginning of October and then decided to cut it back three weeks later? Will he also let us into a secret? Was that decision taken in Edinburgh or London?

Mr. Ancram: I always listen carefully to what the hon. Member for East Lothian (Mr. Home Robertson) has to say about improvement schemes as I know that he is a great believer in them so far as his own personal housing is concerned.— [Interruption.]

Mr. Speaker: Order. We must hear what the Minister has to say.

Mr. Ancram: I must repeat to the hon. Gentleman that in the Budget this year the extent of the scheme was made clear—that the closing date would be 31 March 1984— and that remains the case. We simply confirmed that the scheme would not be extended.

Mr. Ron Brown: Is the Minister aware that the scheme is repeatedly abused by speculators, particularly by a consortium of Miller, Barratt and Wimpey, which intends to take over a large part of the West Pilton area— agreed to of course by his cohorts on Edinburgh district council? Will he take action to stop this abuse of the scheme, an abuse that has been a scandal in Scotland for some time?

Mr. Ancram: At least I am grateful for the frankness of the hon. Gentleman in that he confirmed that he did not welcome the scheme in the first place, which is more than some of his hon. Friends do. The most important impact of the scheme during the period for which it ran was the benefit it provided to those whose houses were improved. In view of the large amounts of money that have been committed as a result of the scheme during the two years to which I referred in my original answer, we in Scotland have a lot to be grateful for in that the enhancement took place at all.

Mr. Bruce: While I acknowledge the benefit that many people in Scotland have received from the scheme, may I ask the Minister to confirm that the sudden decision to cut it off, after many local authorities have made considerable efforts to promote it, is a breach of faith with the local authorities—which are acting as Government agents — and the many people who have applied for grant? Will he make it clear to the constituents with whom we shall have to deal that the responsibility lies with the Scottish Office and not with the local authorities?

Mr. Ancram: It appears that the hon. Gentleman did not listen to what I said. The closing date was known to local authorities and, I presume, to himself. We appreciate that certain commitments have been made by local authorities for expenditure next year. As I made clear in the House recently, commitments to expenditure that has been legally incurred by the date of the announcement that the scheme would not continue will be taken fully into account in the allocations that we make.

Mr. Dewar: Is the Minister aware that the rather unfortunate innuendo in his remarks about my hon. Friend the Member for East Lothian (Mr. Home Robertson) are something that I would like to think he will regret when he has time to consider them, because they were unworthy of someone in his position and will reflect no discredit on my hon. Friend but quite a lot on the Minister?
Let us brush past the air of unreality that has marked questions from Conservative Members. If the Minister is saying that there is no mess and no difficulty on the home improvement and repairs grants side, will he give a guarantee that, not only will existing grant applications that have been approved—but which cannot be dealt with in this financial year and will be carried over into 1984–85— be met, but that local authorities will have finance to continue to take new applications for the remaining part of this year and the next financial year? Is he aware that if that is not the position what he has done is to end access to grants for owner-occupiers, so justifying the understandable cries of betrayal that have come from Conservative councillors, particularly in the city of Glasgow?

Mr. Ancram: The hon. Gentleman knows that when I spoke on this matter in the House recently I made it clear that any commitments to expenditure under these schemes


legally entered into—that is, applications approved by 20 October—would be taken fully into account in the allocations made by my Department.

Mr. Maxton: What about an apology?

Mr. Ancram: Perhaps the hon. Gentleman will allow me to answer the hon. Member for Glasgow, Garscadden (Mr. Dewar).
I also announced on 20 October that we had asked all housing authorities to provide us with information on the extent of the grant commitments. Until we have that information it will be impossible to ascertain the overall effect that the announcement is having.

Oral Answers to Questions — Health Service Laundry

Mr. Willie W. Hamilton: asked the Secretary of State for Scotland how many health boards are now using prison laundries to process Health Service laundry; and what plans he has to extend this practice.

Mr. John MacKay: Only Forth Valley health board uses a prison laundry, but my Department has recently asked two health boards which are at the point of deciding about replacement laundry facilities to consider the possible use of Shotts prison laundry as one way of meeting their needs.

Mr. Hamilton: Have the trade unions been consulted upon this matter and have they agreed to accept the proposal? Can he name the health boards, other than the Fife health board, that have had their laundry investment programmes stopped so that the operations may be transferred to prisons and other private enterprise establishments?

Mr. MacKay: I did not know that prisons were private enterprise establishments, but perhaps they are. My right hon. and hon. Friends will be interested in that. The Fife, Ayrshire and Arran health boards have been asked to consider the possibility of using prison laundry facilities at Shotts as one of the ways of meeting their need for new laundries. Unless the hon. Gentleman thinks that prisoners should be given work that amounts to the treadmill, he should welcome the proper use of the laundry facility, which was made available by the Labour Government.

Oral Answers to Questions — SOLICITOR-GENERAL FOR SCOTLAND

Information Technology

Mr. Henderson: asked the Solicitor-General for Scotland what progress is being made in his Department in the use of information technology.

The Solicitor-General for Scotland (Mr. Peter Fraser): My Department has been actively engaged for about two years in investigating and developing the potential uses of computer technology for the preparation of Scottish legislation and the storage and retrieval of that and other Scottish legal material. The Crown Office is also planning a major project in information processing in the procurator fiscal service.

Mr. Henderson: I am grateful to my hon. and learned Friend for that reply. Does he envisage the accessibility of the data bases being more widely available to Members of Parliament, legal practitioners and the general public? If he has received representations from the information

technology industry in Scotland will he consider whether some of the systems developed in his Department might be marketable in other countries?

The Solicitor-General for Scotland: I am grateful to my hon. Friend for his interest. We are involved with specialist techniques in looking towards what might be done for the drafting of Scottish legislation. We envisage that the data base that is built up within the Lord Advocate's Department might have a use for Members of Parliament and the legal profession as well as for parliamentary draftsmen.

Scottish Law Commission

Mr. Canavan: asked the Solicitor-General for Scotland what subjects he expects to discuss at his next meeting with the Scottish Law Commission.

The Solicitor-General for Scotland: My hon. Friend the Under-Secretary of State for Scotland responsible for home affairs and I visited the Scottish Law Commission two weeks ago. We had a lengthy and interesting discussion with the Commission, which covered all aspects of its current work, I shall continue to meet the Commission from time to time to discuss its work.

Mr. Canavan: Does the hon. and learned Gentleman recall his written reply before the summer recess to the effect that the Scottish Law Commission was giving top priority to the preparation of the report on the law of diligence, which would include recommendations on the future of warrant sales? What exactly does "top priority" mean, bearing in mind that the Commission has been dragging its feet on this matter for the best part of 12 years or more? When will the Government introduce legislation to abolish for ever the barbaric practice of warrant sales?

The Solicitor-General for Scotland: "Top priority" means exactly what it says. The Commission is actively engaged in this work. I think that the hon. Gentleman repeatedly underestimates the difficulty of the work that is involved. If it were merely a matter of abolishing warrant sales, that might be simply enough done. However, the hon. Gentleman and the Labour party are anxious to see that a proper arrangement is made for those who are unable to meet their debts. I am sure that he appreciates—his hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar), who sits on the Opposition Front Bench, will certainly understand this—that this is a complicated matter and that it is a necessary part of the Commission's work.

Mr. MacKenzie: May I remind the hon. and learned Gentleman that in the early 1970s, with the support of the then Lord Advocate, I successfully introduced a Bill on warrant sales? I am bound to remind him, too, that I did so with little help from the Commission, which assured me that it was working hard on the subject and had gone far ahead with its exercise in diligence. We have been told this for about 12 years now. When the hon. and learned Gentleman next meets the chairman of the Commission, will he tell him that even the most patient of us find that our patience is wearing a trifle thin?

The Solicitor-General for Scotland: The right hon. Gentleman is known for his patience. If he reads what my right hon. and learned Friend the Lord Advocate has said, and what appeared in the Conservative party manifesto, he


will appreciate that there is a clear recognition and understanding that the position of warrant sales needs to be altered. I can do nothing other than reiterate that this is an extremely complicated matter and that some of the problems over the payment of debts need to be resolved. If that is not done, what will be achieved will be exactly the opposite of what Labour Members want. It will mean the withdrawal of credit from those who need it most. The Scottish Council for Civil Liberties has understood that, even if Labour Members have not.

Mr. Ron Brown: When the hon. and learned Gentleman next meets the Commission, will he make it clear that he is opposed to the system which allows sheriffs to act as judge, jury and prosecution in Scottish courts? Does he agree that it is an absolute scandal?

The Solicitor-General for Scotland: I shall make that point to the Commission, but I shall not be able to explain what is meant by it.

Matrimonial Homes (Family Protection) (Scotland) Act 1981

Mr. Dewar: asked the Solicitor-General for Scotland whether he is satisfied with the operation of the Matrimonial Homes (Family Protection) (Scotland) Act 1981 and in particular with the effectiveness of exclusion orders.

The Solicitor-General for Scotland: I am aware that doubts have been expressed as to how far the Act is effective in protecting women from violence. However, I remain of the view, which I expressed to the hon. Gentleman on 2 March, that it would be premature to draw firm conclusions about its effectiveness. The Government will continue to monitor the position and my right hon. Friend the Secretary of State for Scotland has under consideration a proposal for research on the operation of the Act.

Mr. Dewar: I welcome what the hon. and learned Gentleman has said about research and monitoring. Does he accept that there are two particular areas of worry? The first is exclusion orders. Putting it as gently as I can, there seems to be some incompatibility between the approaches taken by different members of the bench, on occasions at least. There is genuine concern about that. The second area of concern is the transfer of tenancies, an issue which now often has to go through the courts rather than being dealt with by local authorities administratively. I think that the House should watch progress on both these issues extremely carefully. Will the hon. and learned Gentleman undertake to make the results of the research and monitoring public or perhaps, despite the criticism of the past few minutes, to invite the Commission to produce a supplementary paper, which could bring us up to date with its thinking on how the Act is developing?

The Solicitor-General for Scotland: I am grateful to the hon. Gentleman for his remarks. As he will appreciate, the research project is for my right hon. Friend the Secretary of State for Scotland. His comments about the interpretation of section 4 by the courts is of less concern than it was when the issue was raised in March. The attitudes currently being adopted might be described as less restrictive than they were originally. I am aware that a number of local authorities have expressed their concern about the effect of legislation on the transfer of tenancies.
I am sure that my hon. Friend the Under-Secretary of State for Scotland who has responsibilities for these matters is aware of that, too.

Mr. Malone: Is my hon. and learned Friend aware that during the two years of implementation of this piece of legislation considerable disquiet has grown up in the legal profession about many of its terms, especially at the stage of conclusion of missives, which is promoting much uncertainty in the legal profession and in conveyancing generally? Does he propose, after the two years of implementation, to consult the Law Society of Scotland with a view to mitigating the uncertainties?

The Solicitor-General for Scotland: I am aware that there have been some conveyancing difficulties as a result of the implementation of the Act. It is my understanding that in large measure these difficulties are being resolved. If there are outstanding problems, I shall be more than glad to consult either my hon. Friend or the Law Society to ascertain what can be done to eliminate the difficulties.

Mr. Ernie Ross: Is the hon. and learned Gentleman aware of the concern of many specialist groups that work within this area of the law, which are concerned about some of the difficulties that have arisen over the implementation of the Act? Will he be prepared to place in the Library, or in the Official Report, the guidelines that are given to the police on the implementation of the Act by chief constables?

The Solicitor-General for Scotland: This point was raised with an interested group which met the Lord Advocate. He said that he would not be prepared to do what the hon. Gentleman asks. The hon. Gentleman must appreciate—I know that the point that especially worries him is the use of the power of arrest where there has been a breach of interdict—that on occasions where there is the prospect of a breach of interdict, the procurator fiscal takes criminal proceedings against the person who is alleged to be in breach of interdict.

Salmon

Mr. Bill Walker: asked the Solicitor-General for Scotland what instructions his office has issued to procurators fiscal with regard to prosecutions involving the poaching and the reset of salmon.

The Solicitor-General for Scotland: The offence of poaching salmon includes either the taking of fish without permission or by unlawful methods. Such unlawful action does not in itself involve stealing and so the offence of reset does not arise. The level of poaching is a matter which I view with grave concern, but I am satisfied that where there is sufficient evidence procurators fiscal take proceedings to prove the charge.

Mr. Walker: Like me, my hon. and learned Friend has some fine salmon rivers in his constituency. Does he agree that it is difficult to prosecute those who take salmon from the rivers on a commercial basis? Will my hon. and learned Friend and his officers study this matter carefully to see what can be done about it?

The Solicitor-General for Scotland: I am aware of the problems that have been occurring. My hon. Friend will be aware that, in Perth, Sheriff Wheatley has said in the clearest terms that serious penalties will be imposed if poaching is established on a commercial basis. There are


problems about what will happen when the poached salmon is found in the hands of people running hotels and restaurants. This difficulty must be faced.

Register of Members' Interests

Mr. Max Madden: On a point of order, Mr. Speaker. You will know that since the general election the registrar responsible for preparing the Register of Members' Interests has contacted all Members asking any who have interests to submit them to him for inclusion in the Members' register. I understand, however, that the register is not available for inspection by either Members or the public. I understand also that it will not be available for inspection or published until the Select Committee on Members' Interests has authorised publication, which could be some time.
In these circumstances, I felt that it would be helpful for you, Mr. Speaker, to advise new Members and, indeed, former Members, of the requirement to disclose interests during debates. I should be grateful also if you would advise Members about the wisdom of disclosing interests before seeking meetings with Ministers.
I feel that it would be helpful for you to confirm the advice which has been given by your predecessors about the requirement for Members to disclose any interests that are relevant to a debate, especially in the present circumstances when the register will not be available for inspection for some time.

Mr. Dennis Skinner: Further to that point of order, Mr. Speaker. When you examine the request made by my hon. Friend the member for Bradford, West (Mr. Madden), will you bear in mind the fact that since the register was compiled many years ago there have been developments and some of the categories are perhaps not sufficiently broad to encompass all the activities in which Members engage.
For instance, last week it was reported in The Sunday Times that a type of agency has been set up for political persons, including Members of Parliament to take part in non-political appearances. It was said that the leader of the Liberal party was able to gain as much as £800 a time for non-political appearances. Incidentally, this was denied. It was suggested by the person who was in charge of prime performers that the figure was not as high as that. Is it possible that a Member of Parliament, especially a leader of the Liberal party who has made his name through politics, is picking up money on the side in that fashion'? He told the Liberal party conference not to call upon him to undertake many activities in the forthcoming year, and now we know the reason.

Mr. Speaker: I shall answer the point of order which has been raised by the hon. Member for Bradford, West (Mr. Madden), who has done a service to the House in raising this matter, because the Select Committee has not yet authorised publication and, indeed, it has not yet been set up. I am pleased to have the opportunity to remind the House that it is necessary for hon. Members to declare an interest. It is not necessary for a Member to declare an interest at Question Time. I thank the hon. Gentleman for drawing this matter to our attention.

Televising of Parliament

Mr. Austin Mitchell: I beg to move,
That leave be given to bring in a Bill to provide for the televising of the proceedings of the House of Commons and its committees and to set up a Parliamentary television unit to install the equipment, control the televising, provide feeds and recordings to outside organisations and maintain an electronic Hansard.
It is important to introduce this measure early in the life of this Parliament because the best prospects for acceptance would seem to come from the newer and younger Members who are more open-minded than and not as set in their ways as older Members. They have not relapsed entrenched attitudes that have defeated this type of proposal all too often in the past.
It has always seemed to be wrong that the onus of the argument should be on those supporting television. Indeed, it is wrong to have to make an issue of the matter because it is natural, inevitable and right that the deliberations of this national forum should be available to the people in whose name we are debating through the medium that they prefer, which distorts those deliberations least and from which they receive their news on current affairs and politics. If we do not provide that information people will, as media preferences change — and they have—move away from us and we shall make ourselves irrelevant. We shall turn ourselves into a closed debating society. We shall weaken our power and leave our electors alienated, less well informed and deprived of the facts that they need to make up their minds politically.
What is the relevance to the lives of the public of a series of impressive, well-considered debates if they hear little of those debates? How much information do they receive? A few hundred read Hansard. A few thousand attend the galleries for a few hours each year. A few tens of thousands read the drastically over-simplified accounts of our debates in the quality papers or, in the case of The Guardian, accounts of our debates up to 7 pm. Perhaps a few hundred read the desperate attempts of the parliamentary sketch writers to extract humour from this Chamber and to try to turn us into a cross between an educationally subnormal version of "Yes, Minister" and a distillation of their own ESN prejudices. That is the main part of the coverage. We have reduced ourselves to a theatre with no audience and with only the reviewers writing the script.
As a special treat, we are allowed occasionally to hear a broadcast debate. I am not complaining about that. Monday's continuing broadcast of the debate on cruise was welcome. Indeed, I heard more of it and heard it better in my car than I would have done in the House or in my office. Unfortunately, radio tends to infuriate because our microphones are omnidirectional, pick up extraneous noise and do not convey all that is happening in the Chamber. The advent of radio broadcasts of debates has strengthened the case for television. Those are the only ways in which we reach the public.
Our problem is that Parliament can appear a dull, irrelevant institution with its Members' speeches reduced to a series of noises off. We can appear to be bit part players in a constitutional drama. That has occurred because we fear television. By not being allowed into the Chamber, television has been forced to develop alternative political coverage, which alienates us still further. We then


compound the problems by complaining about that. We have wilfully removed ourselves from the centre of interest and concern by not permitting coverage by the medium from which we receive most of our information. We have done so against the people's better instincts. All the poll evidence shows that the majority of people want Parliament to be televised. MORI, the last poll I read, showed in February 1980 that 56 per cent. thought the televising of Parliament a good idea, and only 32 per cent. thought it bad. We have done so against the wishes of the television organisations because there is no doubt that they want to cover the proceedings of the House in whole or in part. It would be appropriate to have full-time coverage on the cable system which is shortly to expand enormously. There could be edited highlights on news programmes, edited summaries on current affairs programmes on a day or a week in Parliament.
We have also done so against the precedents of overseas Parliaments because most of them in the major countries are televised in some form.
An Inter-Parliamentary Union report in 1978 surveyed 22 legislatures covered by television and found widespread satisfaction among members and the public. Since then television coverage has been extended to Canada and the United States House of Representatives. That is important, because the coverage that I propose is the same as that developed in those two countries. What they have done and what we should do is to set up a parliamentary television unit answerable to the House through Mr. Speaker, by which coverage will be unobstrusive through wall-bracket mounted cameras without camera crews and only slightly increased lighting. More important, the coverage will be based primarily on a shot of the speaker with no panning off to empty Benches, sleeping Members and the reaction shots that Members fear. It is a coverage so staid that "Variety", the stage business periodical, called it "Dullsville D.C." in Washington. Critics of television try to have it both ways. They tell us that it will reduce our proceedings to a farce and exaggerate and distort them, but they also complain that it will be dull and that no would want to watch. They cannot have it both ways.
The only discernible change in Canada and the United States have been Members closing in behind the speaker —something from which I would be freed in these Olympian heights, although Ministers might be glad to see where the knives are coming from—although it was only a short-lived phenomenon. There has been a strengthening of the Opposition which is a good thing and something that this Parliament needs. There have been sharper questioning and more incisive speeches. It gives the lie to all those who argue that television coverage of this Chamber would be like TV-am 24 hours a day. I apologise for calling TV-am the unacceptable face of the hon. Member for Thanet, South (Mr. Aitken) who is TV-am.
It is not true that there would be cameras with crews, that Mr. Speaker would have to wear a denim wig and would be signalling to speakers with a two-fingered gesture to tell them that they had a further two minutes in which to make their contribution. There would be no change. Techniques which would be relevant to a studio would be irrelevant to the coverage that I propose. It would be a neutral coverage without extraneous noises. In the

House of Representatives one man leapt from the balcony in a desperate attempt to appear on television. The incident was shown only by the momentary expression of alarm crossing the face of the speaker who was then holding the television.
I see no reason why we should have an inferiority complex—something many hon. Members have—about whether our proceedings are fit to be shown to the people. They are and we would improve and strengthen our position if they were.
Our role is not, as it is argued, to convince each other in closed debate; it is as on a stage on which the battle between the parties is put; the case against the Government is put and argued and the facts put before the people. What use is that stage if the battle is not reaching the people? Parliament is the great forum of the nation where the people's representatives discuss the big issues of the day. What use is that debate if the people do not hear it? It is a forum of inquiries and analysis, bringing informed opinion to bear on the decisions through the Select Committees. What use is that inquiry if it does not reach the people in whose name it is carried on? Each of those functions is better performed, and the House is more effective, if what we are doing is brought home to the people, or at least to that interested and concerned section of the people who will undoubtedly want to watch and who, from overseas experience, do watch.
The campaign to admit television to the Chamber and to the Standing and Select Committees has made slow but real progress over the years. It has been countered by prejudice and misinformation about what television would do, by fear of the medium, of what we are and of the face that we present to the world. Those arguments were always irrelevant, but the kind of coverage that I propose—the methods that have been used so successfully in Canada and the United States — would make them completely irrelevant. The country would see us for what we are. If we are afraid of what we are and do not like what we do, we should not be here and should not be doing it.
In conclusion— I am watching your floor manager signals, Mr. Speaker—we should seize this opportunity because we are answerable to the people. We are elected by and serve them. We have no right to exclude them from our deliberations and to deny their legitimate interest in what happens in the Chamber when television, and the public support and involvement that it brings, would strengthen the Chamber against the executive. Television will come. We should seize the opportunity to speed the day.

Question put:—

The House divided: Ayes 164, Noes 159.

Division No. 57]
[3.45 pm


Ayes


Ancram, Michael
Brown, Hugh D. (Provan)


Ashby, David
Bruce, Malcolm


Ashdown, Paddy
Buck, Sir Antony


Banks, Tony (Newham NW)
Burt, Alistair


Beckett, Mrs Margaret
Butterfill, John


Beith, A. J.
Canavan, Dennis


Bennett, A. (Dent'n &amp; Red'sh)
Cartwright, John


Bermingham, Gerald
Clarke, Thomas


Best, Keith
Clay, Robert


Bevan, David Gilroy
Coombs, Simon


Bottomley, Peter
Corbyn, Jeremy


Brandon-Bravo, Martin
Cormack, Patrick


Bray, Dr Jeremy
Craigen, J. M.


Brown, Gordon (D'f'mline E)
Cranborne, Viscount






Davis, Terry (B'ham, H'ge H'l)
Maclennan, Robert


Deakins, Eric
McNamara, Kevin


Dewar, Donald
McQuarrie, Albert


Dickens, Geoffrey
Madden, Max


Dobson, Frank
Maples, John


Dorrell, Stephen
Marek, Dr John


Douglas, Dick
Marshall, David (Shettleston)


Dover, Denshore
Mawhinney, Dr Brian


Dubs, Alfred
Maxton, John


du Cann, Rt Hon Edward
Meacher, Michael


Dykes, Hugh
Meadowcroft, Michael


Eadie, Alex
Meyer, Sir Anthony


Eastham, Ken
Mikardo, Ian


Fatchett, Derek
Miller, Hal (B'grove)


Fenner, Mrs Peggy
Mitchell, Austin (G't Grimsby)


Fields, T. (L'pool Broad Gn)
Moynihan, Hon C.


Fisher, Mark
Nellist, David


Flannery, Martin
Newton, Tony


Fookes, Miss Janet
O'Neill, Martin


Foot, Rt Hon Michael
Ottaway, Richard


Foster, Derek
Parry, Robert


Foulkes, George
Pendry, Tom


Fraser, Peter (Angus East)
Penhaligon, David


Garel-Jones, Tristan
Pike, Peter


Godman, Dr Norman
Powell, Raymond (Ogmore)


Gould, Bryan
Radice, Giles


Greenway, Harry
Raison, Rt Hon Timothy


Ground, Patrick
Randall, Stuart


Hamilton, W. W. (Central Fife)
Rathbone, Tim


Hanley, Jeremy
Rhodes James, Robert


Harvey, Robert
Rhys Williams, Sir Brandon


Haselhurst, Alan
Richardson, Ms Jo


Hattersley, Rt Hon Roy
Roberts, Allan (Bootle)


Hayhoe, Barney
Robinson, G. (Coventry NW)


Haynes, Frank
Ross, Stephen (Isle of Wight)


Hayward, Robert
Rost, Peter


Healey, Rt Hon Denis
Rowlands, Ted


Heathcoat-Amory, David
Sheerman, Barry


Heffer, Eric S.
Sheldon, Rt Hon R.


Hickmet, Richard
Sims, Roger


Hind, Kenneth
Skinner, Dennis


Hirst, Michael
Smith, C.(Isl'ton S &amp; F'bury)


Hogg, Hon Douglas (Gr'th'm)
Smith, Rt Hon J. (M'kl'ds E)


Hogg, N. (C'nauld &amp; Kilsyth)
Smith, Tim (Beaconsfield)


Holland, Stuart (Vauxhall)
Soley, Clive


Hooson, Tom
Steel, Rt Hon David


Howard, Michael
Stern, Michael


Howell, Rt Hon D. (S'heath)
Stewart, Allan (Eastwood)


Hoyle, Douglas
Stewart, Andrew (Sherwood)


Hughes, Simon (Southwark)
Strang, Gavin


Hume, John
Straw, Jack


Johnson-Smith, Sir Geoffrey
Temple-Morris, Peter


Johnston, Russell
Thompson, J. (Wansbeck)


Jones, Robert (W Herts)
Thorne, Stan (Preston)


Key, Robert
Townsend, Cyril D. (B'heath)


King, Roger (B'ham N'field)
Wainwright, R.


Kinnock, Rt Hon Neil
Wallace, James


Knowles, Michael
Ward, John


Lawler, Geoffrey
Wareing, Robert


Leigh, Edward (Gainsbor'gh)
Watson, John


Lester, Jim
Whitfield, John


Lewis, Terence (Worsley)
Wiggin, Jerry


Litherland, Robert
Wigley, Dafydd


Lloyd, Tony (Stretford)
Williams, Rt Hon A.


Loyden, Edward
Wrigglesworth, Ian


McCrindle, Robert
Young, David (Bolton SE)


McDonald, Dr Oonagh



McKay, Allen (Penistone)
Tellers for the Ayes:


McKelvey, William
Mr. John Home Robertson and Mr. Jonathan Aitken.


Mackenzie, Rt Hon Gregor





Noes


Adley, Robert
Berry, Sir Anthony


Alison, Rt Hon Michael
Biggs-Davison, Sir John


Atkins, Robert (South Ribble)
Boscawen, Hon Robert


Baker, Nicholas (N Dorset)
Bowden, A. (Brighton K'to'n)


Banks, Robert (Harrogate)
Braine, Sir Bernard


Batiste, Spencer
Bright, Graham


Bennett, Sir Frederic (T'bay)
Brinton, Tim


Benyon, William
Brown, M. (Brigg &amp; Cl'thpes)





Brown, R. (N'c'tle-u-Tyne N)
Lord, Michael


Bruinvels, Peter
McCartney, Hugh


Budgen, Nick
McCurley, Mrs Anna


Callaghan, Jim (Heyw'd &amp; M)
Macfarlane, Neil


Chapman, Sydney
MacGregor, John


Clark, Dr David (S Shields)
MacKay, Andrew (Berkshire)


Clark, Sir W. (Croydon S)
MacKay, John (Argyll &amp; Bute)


Cocks, Rt Hon M. (Bristol S.)
Maclean, David John.


Coleman, Donald
McNair-Wilson, M. (N'bury)


Concannon, Rt Hon J. D.
McNair-Wilson, P. (New F'st)


Conlan, Bernard
McWilliam, John


Conway, Derek
Major, John


Couchman, James
Malins, Humfrey


Cowans, Harry
Malone, Gerald


Davies, Rt Hon Denzil (L'lli)
Marland, Paul


Dicks, T.
Marlow, Antony


Dixon, Donald
Mason, Rt Hon Roy


Dormand, Jack
Mather, Carol


Duffy, A. E. P.
Maude, Francis


Edwards, R, (W'hampt'n SE)
Maxwell-Hyslop, Robin


Emery, Sir Peter
Merchant, Piers


Evans, John (St. Helens N)
Miller, Dr M. S. (E Kilbride)


Ewing, Harry
Mills, Iain (Meriden)


Eyre, Reginald
Mills, Sir Peter (West Devon)


Fairbairn, Nicholas
Molyneaux, Rt Hon James


Forrester, John
Monro, Sir Hector


Forsyth, Michael (Stirling)
Montgomery, Fergus


Forsythe, Clifford (S Antrim)
Morris, Rt Hon A. (W shawe)


Forth, Eric
Morrison, Hon P. (Chester)


Fox, Marcus
Nicholls, Patrick


Freeman, Roger
Onslow, Cranley


Fry, Peter
Patchett, Terry


Gale, Roger
Pavitt, Laurie


Galley, Roy
Peacock, Mrs Elizabeth


Gilbert, Rt Hon Dr John
Pollock, Alexander


Gourlay, Harry
Powell, Rt Hon J. E. (S Down)


Gower, Sir Raymond
Powell, William (Corby)


Grant, Sir Anthony
Powley, John


Griffiths, E. (B'y St Edm'ds)
Prentice, Rt Hon Reg


Griffiths, Peter (Portsm'th N)
Proctor, K. Harvey


Grist, Ian
Raffan, Keith


Hamilton, Hon A. (Epsom)
Roe, Mrs Marion


Hamilton, James (M'well N)
Shaw, Sir Michael (Scarb')


Hamilton, Neil (Tatton)
Shepherd, Colin (Hereford)


Hannam, John
Shore, Rt Hon Peter


Hargreaves, Kenneth
Skeet, T. H. H.


Harris, David
Speed, Keith


Harrison, Rt Hon Walter
Spence, John


Hawksley, Warren
Spicer, Jim (W Dorset)


Higgins, Rt Hon Terence L.
Steen, Anthony


Holland, Sir Philip (Gedling)
Stevens, Lewis (Nuneaton)


Holt, Richard
Stewart, Rt Hon D. (W Isles)


Howarth, Gerald (Cannock)
Stokes, John


Howell, Ralph (N Norfolk)
Taylor, Teddy (S'end E)


Hughes, Mark (Durham)
Terlezki, Stefan


Hughes, Robert (Aberdeen N)
Thompson, Donald (Calder V)


Hughes, Roy (Newport East)
Thorne, Neil (IIford S)


Hunter, Andrew
Thurnham, Peter


Irving, Charles
Tinn, James


Jessel, Toby
Tracey, Richard


John, Brynmor
Wakeham, Rt Hon John


Jones, Barry (Alyn &amp; Deeside)
Walden, George


Jones, Gwilym (Cardiff N)
Walker, Bill (T'side N)


Kershaw, Sir Anthony
Waller, Gary


King, Rt Hon Tom
Warren, Kenneth


Knight, Gregory (Derby N)
Wheeler, John


Knight, Mrs Jill (Edgbaston)
Winterton, Nicholas


Lamond, James
Wood, Timothy


Lang, Ian
Woodall, Alec


Leighton, Ronald



Lennox-Boyd, Hon Mark
Tellers for the Noes:


Lewis, Ron (Carlisle)
Mr. John Browne and Mr. Kenneth Carlisle.


Lilley, Peter



Lofthouse, Geoffrey

Question accordingly agreed to.

Bill ordered to be brought in by Mr. Austin Mitchell, Mr. Jack Ashley, Mr. A. J. Beith, Mr. Tom Clarke, Mr.


Edward du Cann, Sir Ian Gilmour, Mr. George Foulkes, Mr. Roy Hattersley, Mr. Roy Jenkins, Sir Geoffrey Johnson-Smith and Mr. Norman St. John-Stevas.

TELEVISING OF PARLIAMENT

Mr. Austin Mitchell accordingly presented a Bill to provide for the televising of the proceedings of the House of Commons and its committees and to set up a Parliamentary television unit to install the equipment, control the televising, provide feeds and recordings to outside organisations and maintain an electronic Hansard: And the same was read the First time; and ordered to be read a Second time upon Friday 18 November and to be printed. [Bill 47.]

Orders of the Day — Petroleum Royalties (Relief) Bill

Not amended (in the Standing Committee), considered.

Bill reported, without amendment.

4 pm

The Minister of State, Department of Energy (Mr. Alick Buchanan-Smith): I beg to move, That the Bill be now read the Third time.
I am not sure whether the hon. Member for Great Grimsby (Mr. Mitchell) would describe the Bill as one of the edited highlights of the parliamentary day. None the less it is an important Bill, which was under consideration in the previous Parliament. It was introduced early in this Parliament and has been considered in Committee. I thank hon. Members on both sides of the House who participated in the Committee, although I regret that the Committee could not accept any of the amendments that were proposed. However, the Bill has achieved the broad objectives that my right hon. Friend the Secretary of State and I described on Second Reading.
The Bill is relatively short and simple. Its straightforward purpose is to exempt from the payment of royalty, while leaving them subject to petroleum revenue tax and corporation tax, fields on the United Kingdom continental shelf outside the southern basin, the development of which was approved on or after 1 April 1982.
As the House knows, royalty is at 12·5 per cent., although licensees of fields allocated in the first to fourth licensing rounds are allowed to offset conveying and treating costs against royalty. Royalty payments are themselves allowable against petroleum revenue tax, which is at 75 per cent., and reduce profits liable to corporation tax, which is at 52 per cent. Thus, the effect of the Bill is that when a company has exhausted its allowances against petroleum revenue tax and corporation tax, its payments on the margin will be at 88 per cent. instead of the present rate of 89·5 per cent. Therefore, the net effect of the change proposed in the Bill is to reduce the marginal rate of payments by the exempted fields not by 12·5 per cent. but by only 1·5 per cent.
On Second Reading and in Committee many issues were raised. I do not want to go over them in detail, but I shall pick out three of the main issues that we debated in Committee. I hope that, with the leave of the House, I shall have the opportunity at the end of the debate to respond to further points that right hon. and hon. Members wish to raise.
One of the main criticisms of the effect of the Bill was that, in terms of revenue, it could give rise to considerable and quantifiable cost to the nation. It is worth reflecting on the background. Last year there was a review of the United Kingdom continental shelf and the fiscal arrangements for it. In that review we considered all the prospects that operators had identified as candidates for development over the next five to 10 years. In the review and our discussions with the interests concerned we looked at the fields' expected profitability and rates of return both under the fiscal regime current at the time and under possible changes in that regime.
This was not contested by anyone when the review was carried out. In our assessment, we were looking into the


future. Many fields were profitable before tax but not after tax under the fiscal regime then in force, whether oil prices rose or not. Those post tax returns were made particularly unattractive by the payments of royalty required from early in the fields' producing lives.

Mr. Dick Douglas: Instead of talking in fairly amorphous terms—perhaps confidentiality decrees that—perhaps the Minister could tell the House the size and the number of fields surveyed. It is extremely important for the House to have an idea of the range of reserves.

Mr. Buchanan-Smith: I am happy to respond to the hon. Gentleman. Without breaching confidentiality, one cannot be precise because one does not know what specific companies' proposals are. I can best answer the hon. Gentleman's question in a slightly oblique way. Some developments that will be covered by the Bill had already been approved before it came to the House. When I took over my responsibilities in June a further 10 developments were under appraisal. Looking ahead over the next two years, there is probably a further figure in the mid-teens. One cannot be precise because it is up to the companies to make the proposals. We have identified the likely proposals over the next two years or so.
The hon. Gentleman will appreciate that one cannot be more precise. However, I hope that I have given him an idea of the scale of development that I foresee over the next couple of years. I can only give estimates because, after we get the proposals, we shall have to discuss them with the companies and operators concerned to see whether they meet various other criteria before they become approved developments in one form or another.

Mr. Ted Rowlands: We asked the Minister about this matter in Committee. Things have been pushed along for a few weeks. Will the Minister give us the broadest idea of the value of the legislation to the two fields that have been legislated for retrospectively? The right hon. Gentleman rested his case on the decrease in payments from 89·5 per cent. to 88 per cent. Even the Secretary of State said on Second Reading that he was willing to give an illustration of a field with 55 million tonnes of reserves. There was a benefit there of 3 per cent., which on a £4·5 billion or £5 billion field would be worth £120 million of relief.

Mr. Buchanan-Smith: My right hon. Friend the Secretary of State was helpful to the hon. Gentleman and the House on that matter. My right hon. Friend was giving a hypothetical example of a field. I am interested that the hon. Gentleman has returned to the matter. I am not surprised, because it was a major point in Committee. I thought that the hon. Member for Dunfermline, West (Mr. Douglas) would refer to it too, but he made a more interesting point, which was more relevant to the developments in the North sea. I dealt with the matter in Committee. The hon. Gentleman and other hon. Members tried to press me on it. There is no way that I can answer his question, even in relation to those two fields. I repeat this for the benefit of the House, as it was said in Committee. It is nothing new. There is a great deal of confidential matter in the annexe B proposals that I have to approve, covering the profile of the fields. The moment that I give estimates one does not need to be clever to work out, with the use of a calculator, the profile that the

operators of the fields have given to me, and the basis on which I have approved the proposals. If I did that, I should be breaking the confidentiality of the relationship between my Department and the relevant operators and the companies. I shall therefore not give way to the pressing fashion in which the hon. Gentleman puts his case.
I have already dealt with the effect on the margin and my right hon. Friend the Secretary of State gave examples of what the effect would be on oilfields of various sizes. It is impossible to quantify in national terms the effect of the changes without a remarkable faculty for speculation and foresight, which most of us do not have. We cannot predict precisely what developments would not have proceeded had the fiscal regime not been changed. There is no doubt that the effect of the Bill, by increasing the attractiveness of developing the sort of fields now in prospect, will be to increase both the national supply of oil and the national revenue. As I said on Second Reading and in Committee, we believe that if we had not made the changes the proposals would not have come forward, the oil would not have flowed and revenue would not have been earned anyway. The fields affected are those expected to produce oil by the end of the decade. We believe that our proposal will help to stem the decline in United Kingdom continental shelf production as the reserves in existing fields are depleted. Despite the pressure put on me by the hon. Gentleman, I cannot say anything further about this matter.
Concern was expressed in Committee about the effects of the changes in royalty levels on security of supply. It was suggested that the loss of the option to take royalty in kind might be detrimental to our security of supply. If the Government denied companies the incentive to develop new fields, that would undermine our security of supply far more comprehensively than any notional loss of royalty oil. BNOC still has access to 51 per cent. of production through participation. Royalty merely increases that figure to 57⅛ per cent. To put it at its starkest, we believe that the consequence of the abolition of royalty will be that 51 per cent. of something will be better for BNOC and its responsibility for the security of oil supplies than 57⅛ per cent. of nothing. In other words I believe that the changes are so much on the margin as to have a minimal effect on security of supply.
BNOC's participation role, important though it is, is not the principal factor in security of supply. The best measure that any Government can take to maintain security of supply is to ensure that the volume of crude oil production is substantial, because that is a vital factor in underpinning a competitive and commercial market downstream. The Government intend to contribute towards that end by ensuring that maximum economic development of the United Kingdom continental shelf takes place. The Bill seeks to do that and in no way undermines future security of supply.
The share that the United Kingdom industry should have in future developments of the United Kingdom continental shelf is a matter that concerns all hon. Members. Bearing in mind my responsibilities, I am as concerned as anyone, if not more concerned, about this matter. Successive Governments have regarded the future development of the shelf as a top priority. We must also recognise that all oilfields are not alike as we are dealing with a physical resource in a natural environment. Different fields require different hardware for their development. The North sea industry has developed and


become more mature and we have gained knowledge of new technology. I pay tribute to what the United Kingdom offshore industry has achieved and the way in which it has applied itself to the goods and services that it supplies.

Mr. Douglas: Will the Minister bear in mind what the Minister of State, Department of Trade and Industry said yesterday about the Britoil order for Scott Lithgow? I hope that the Minister will use his good offices to ensure that the order remains with a British yard. Will the Minister give his views about Britoil's need for this piece of hardware, which is a sophisticated rig capable of drilling in 4,500 ft. of water? We are assured that Britoil requires a rig of the specified design and I hope that the order will remain with a British yard.

Mr. Buchanan-Smith: The hon. Gentleman has rasied a matter of genuine concern. I am extremely interested and concerned about what will happen, but I cannot comment on or directly intervene as it is a matter for negotiation between Britoil and the yard. The negotiations must go through the formal stages, as the hon. Gentleman realises and understands. I assure the hon. Gentleman that I am watching the position carefully and I am in close touch not only with my right hon. Friend the Secretary of State for Trade and Industry but also with my right hon. and hon. Friends at the Scottish Office. I emphasise that the matter is one for negotiation between the two companies. The position, design and capability of the rig is a matter for the commercial discretion of the company involved. I assure the hon. Gentleman that I will watch this matter very carefully. I am sure that he understands why I cannot say anything further at present.

Mr. Rowlands: I understand and appreciate the hon. Gentleman's caution. The Government have a 51 per cent. majority shareholding in Britoil. Additionally, they have a golden share, so they have effective control over the company and can exercise that control at any time. I trust that the Government will exercise their influence in the proper manner.

Mr. Buchanan-Smith: The hon. Gentleman's approach is appealing in trying to press me on this and other matters. The purpose of the golden share is not related to the present position and could not and would not be used in such circumstances. Although the Government have a 51 per cent. share in Britoil, such decisions, as my predecessors have made clear, are within the commercial discretion of the company and the directors appointed to run it.

Dr. Norman A. Godman: I am sure that the Minister appreciates my constituents' deep concern about the current negotiations. I hope that the right hon. Gentleman will assure us of the importance of Scott Lithgow, not just to the Scottish economy but to the development of the offshore engineering industry. I am sure that the Minister will readily acknowledge that we were latecomers to this maritime activity.
Changes are taking place within the yard, both in attitudes and in the need to hit peak efficiency. As I have said on a number of occasions to Mr. Day and the joint managing directors of Britoil, Mr. Ian Clarke and Mr. Malcolm Ford, this work force has the skills, experience

and knowledge to produce a first class product. Along with Cammell Laird, this organisation has an important and continuing role to play in the offshore engineering industry.

Mr. Buchanan-Smith: I acknowledge the hon. Gentleman's correct and proper interest, given that he represents the area in which the yard is located as well as so many of those who work in it. I appreciate his concern.
Let us be clear where we are. First, at present the negotiations are wholly between Britoil, the yard and British Shipbuilders. Proper procedures in the contract must be gone through, and that is where the matter must rest for the moment.
Secondly, there are the consequences that might flow from any decisions that might be taken. I can say no more than what I have already said. The Government are aware of and alive to these issues. I know that the hon. Member for Greenock and Port Glasgow (Dr. Godman) has recently met senior people with responsibility in Britoil, and no doubt he put his views direct to them. Equally, the consequences for British Shipbuilders are strictly matters for my right hon. and hon. Friends in the department of Trade and Industry, and I shall draw their attention to what has been said and to the concern that has been expressed. Obviously, I have an interest in some of the consequences that might flow, and I assure the House that those interests will be part of any considerations that may result. I am sorry that I cannot be more forthcoming. The reason is perfectly understood, and in any case neither I nor my Department have ultimate responsibility
Like my predecessors, I wish to continue with the high participation of British industry in offshore oil development. In that respect, I am encouraged by the way in which British industry has responded to the challenge and opportunities given to it and also by the way in which many of the operators have co-operated to give such an opportunity to British industry. At present we are able to meet 70 per cent. plus of the needs of the United Kingdom continental shelf from within the United Kingdom. I welcome that and wish to see it continue, although I appreciate that it becomes all the more challenging and important as we move into deeper waters and as new tehnologies develop. This is an important market which now earns about £2·3 billion a year. My objective is to continue that success.
At this stage that is all I want to say. I have not gone into some of the deeper issues behind the Bill. There is no difference between us on what the Government are trying to achieve, although there are considerable differences about the extent of the method used, on which there have been constructive debates previously.
I have simply tried to dwell on three of the most important issues. I accept that there are many others. I have repeated some of the arguments so that hon. Members who did not serve on the Committee can be aware of them. I shall be happy to respond to any other points that are raised, and I shall listen carefully to what hon. Members say.

Mr. Ted Rowlands: I am grateful to the Minister for the way in which he moved the Third Reading and the spirit in which he approached it. We have no quarrel with him about the way in which he dealt with the Bill in Committee, except for the fact that


he did not accept one of a set of reasonable Opposition amendments. Indeed, the Bill is so perfect that the Government have not even amended it themselves. One suspects that they have been trying to avoid it, but wonders whether one or two amendments might subsequently be inserted, particularly in clause 2.
I take this opportunity to restate our fundamental objections to both the principle and practice of abolishing royalty oil for all new North sea oilfields. This is a wide and sweeping Bill of a kind and character that has not been fully appreciated. Its aim and purpose is to remove all forms of royalty oil in kind or cash in respect of every North sea field outside the southern basin from here on, irrespective of its size, profitability, production profile and character. The Government aim to abolish that completely. Therefore, the Bill is not a small and modest measure. At stake is a profound and basic principle.
The principle of royalty as well as the practical consequences of the Government's actions was the cause of our objection on Second Reading and our constructive but unsuccessful attempts to modify the Bill in Committee. That is why we shall again object to it this evening.
The Minister, more halfheartedly than I expected, attempted to put the Bill in the overall context of North sea oil development. Before he replies, I hope to extract from him what the score will be and what the context is.
The right hon. Gentleman is extremely amiable and appears to have spoken to certain energy correspondents —one has noticed the odd thumb print on the odd press release or background briefing to The Sunday Times business news supplement. The right hon. Gentleman's predecessor used the phrase "boom time", but now the "second wave" of North sea oil development will wash over us. That is the line that has been peddled and pushed out to correspondents of various newspapers. Let us try to identify how far this second wave is likely to hit the beaches or reach the rig yards. There is no one so zealous as the sinner who repenteth.
We have seen the Minister's tax changes and now his absolute devotion to the stimulation of North sea oil development. One would not have thought that these proposals came at the eleventh hour. From the remarks that the Minister has just made one would not have supposed that this Bill followed a period during which the Government nearly brought North sea oil development to a standstill. It ill becomes Ministers to lecture us about the need to provide a stable fiscal regime in the North sea. It was the Labour Government who from 1974 to 1979 provided a fiscal regime for large scale development in the North sea and the present Government have been the gratuitious beneficiary. Therefore, the Minister should not lecture us about creating stability.
One would not have thought that this was the Government who managed to change oil taxation 12 times in four years. Some of the changes which were hastily introduced were capricious and arbitrary and left the industry in total bewilderment. They did not fit the image now being created of a constructive Government who have always wanted to develop the North sea. The inference is that these proposals are a continuation of subtle and sophisticated planning. On the contrary, for four years the Government have squeezed as much revenue as possible from the North sea. The way they did it led almost to a standstill in development. I hope that we shall have no more lectures and no more suggestions that the Minister

is the saviour of North sea oil development. Perhaps he is, because salvation is coming after the creation of damnation.
We must take a closer look at the character of the projections, statements and press releases that we have been reading with interest. We have not heard this second wave stuff, but the Minister has been talking to journalists about it. We all hope that development will take place. The Minister mentioned two fields that are covered retrospectively and ten that are in prospect. Then he rather coyly talked about somewhere in the teens for future development but he did not state a figure. Can the Minister tell us when the first batch of fields which are covered by the legislation, and which will benefit from the incredible abolition of all forms of royalty, will actually produce oil? We want only a vague estimate.
Roughly how many barrels a day are we talking about from the oilfields which will benefit from this legislation and also from the tax reliefs embodied in the Finance Act 1983? In practical terms, it is the number of barrels a day which matters. We want to know whether we shall have sufficient oil and what oil production will be in the mid to late 1980s. We are talking about oilfields which will produce in 1986 or 1987 at the earliest. Perhaps they are more likely to produce in 1989 or 1990. Therefore, we need a forecast so that we can understand how important the boom or second wave will be.
One has to make an assessment of the size of oil production to be able to judge how valuable and significant are the developments the Minister has talked about against a production profile. Some of our oldest, largest and most mature fields are being drained at an alarming rate. We are producing well over our needs, as everyone knows. In net terms we are exporting 30 per cent. of our oil. We could have an argument about depletion. Decisions must be made about whether moderation should be exercised on the pumping out operation of the most mature fields. We need to know the context so that we can assess whether there should be a depletion policy.
A major factor in such an assessment is the sort of oil which will be available from the new fields, especially when we are being asked to approve a Bill which will have such a wide and sweeping consequence as taking away any principle of royalty on every future oilfield north of the southern basin. Before approving the Bill we should understand exactly what the forecasts and assessments are. When the Minister replies, instead of more second wave stuff, can he give us some simple, hard statistics and information about the nature of the developments, and the likely consequences of the developments compared with the rapid depletion of the older North sea oilfields such as Forties and Ninian?
We have been reading a great deal about the extent to which exploration appraisal drilling has suddenly leapt forward. The figures are there for us all to see and the little black charts in the business news on Sunday show them graphically. Does the Minister claim all credit for the exploration? From the way the briefing has been going, one would think that Ministers were drilling personally all over the North sea. They are claiming almost total credit. It is all to do with the magic of Government action. I hope that the Minister will at least agree that much of the sudden surge in exploration appraisal drilling has taken place because a whole batch of licences are reaching


relinquishment stage. To justify the holding of a licence, many companies carry out appraisal drilling to show the Government what great action is going on.
I am not saying that that is the only reason for the surge in exploration. Obviously there is much stimulation in the southern basin on the gas side. I hope that the provisions in the Finance Act have stimulated additional interest in development. As the hon. Member for Bedfordshire, North (Mr. Skeet) knows only too well, the Opposition supported wholeheartedly the measures in the Finance Act. We must have the modest right to qualify the new Government profile and the marvellous job they are doing in stimulating and developing new North sea oil exploration drilling.
I do not think hon. Members on the Government side will be able to point to a single remark or comment by any of my right hon. Friends or myself on Second Reading or in Committee to suggest that we have not supported and will not continue to support sensible measures designed to encourage the exploration and development of the new range of marginal oilfields which will be so essential to the future oil requirements of the nation.
Conservative Members must not try to hang a label around our necks suggesting that we have tried to inhibit or quarrel with sensible, pragmatic taxation changes that stimulate development of the North sea. On the contrary, before the Government's last-minute conversion, we asked them to take a more positive attitude towards the development of marginal fields. That is why we gave strong support to the oil taxation changes in the Finance Act 1983, and even hastened measures through before the election. I am sure that the Minister will agree that the Government had our maximum co-operation on the important taxation changes. They were sensible and quantifiable. We were asked to approve certain tax changes to aid development. We know how much money was involved and what taxation relief we were granting. We happily and willingly gave our support.

Mr. T. H. H. Skeet: I accept that the Opposition gave the Government a certain amount of support during the passage of certain clauses in the Finance Act 1983, but what about the clauses that were excised because the Opposition would not accede to them? That made it necessary to bring forward this Bill today. If the Opposition had given their full support they would have allowed all the clauses to pass.

Mr. Rowlands: I never thought that the hon. Gentleman was part of the usual channels. Indeed, he is an unusual channel in every sense of the word—he is sometimes almost eccentric in his individualism. My understanding is that there was no quarrel between the Government and the Opposition about the provisions that were removed from the Finance Bill. It was agreed that the arguments would be brought forward for further consideration at another time. The Opposition must rightly be vigilant on such matters. No one would be more vigilant than the hon. Gentleman if we were proposing taxation changes. The provisions allowed to go through dealt with essential and immediate changes. We reserved judgment on other measures. We shall continue to take a constructive interest in tax relief that will stimulate development in the North sea.
We oppose the Bill because we are not willing to give our support to the total abolition of royalties for all North sea oilfields from now on. No one in his right mind would do so. As we argued on Second Reading—the Minister admitted that we argued in a constructive manner—such a measure is wholly indiscriminating. It does not relate to the size or character of a field. It has no connection with the way in which oilfields are developed and oil rigs and platforms built. There is no relationship between relief and investment. At least in the taxation changes there was a clear and defined relationship between development and relief. Under this Bill, irrespective of the size, character or profitability of a field, every field in the North sea will receive the same relief. The Opposition are right not to endorse the Bill or to support such a wholly indiscriminate measure.
We object to the Bill because the concept of royalty oil raises issues of ownership and control over one of our most precious resources. It is no accident that almost every oil-producing country —even even those Gulf states that were taken for a ride in so many respects in the evolution and development of their oilfields in the early part of the century —sticks sticks to the simple and basic notion that a nation has the right to royalty oil in kind or in cash. Those countries are of widely varying dispositions and fiscal regimes. Yet since the beginning of oil development they have held on to the concept of royalty oil.
When a decision is taken to abolish that basic principle, there must be a major reason for doing so. Neither on Second Reading, nor in Committee or in the amiable remarks of the Minister today has there been the necessary exceptional reason for total abolition.

Mr. Douglas: Are not the Government taking an extremely depressing view of the probabilities of future finds? While it may be important to give concessions to 25 million or 50 million barrel fields, it is absurd to reject the possibility of our discovering a 500 million or 1,000 million barrel field. Such fields will receive the same concession. Is that not an absurd posture?

Mr. Rowlands: Not only is it an absurd posture, but the reply to that argument from Ministers is that they will impose taxes. Yet I thought that we were trying to produce a stable, fiscal regime for development. It would be better to have a sensitive, tailor-made system of relief related to the size of the field.
Hon. Members who served on the Committee will know that one of the major propositions put forward by the Opposition was that there should be a discriminating character to relief related to the size of fields. I am surprised at the complacency and misunderstanding shown by both the Secretary of State on Second Reading and the Minister in Committee and again today about the role of royalty oil during an oil shortage crisis. The Secretary of State in 1979, the right hon. Member for Guildford (Mr. Howell), faced a serious oil shortage crisis. We all remember the emotional feelings on both sides of the House about the possibility of shortages, and even of rationing. What did the right hon. Member for Guildford say and do then? He said that one of the most useful ways to handle an immediate oil shortage crisis was to take royalty oil in kind or in cash.
It is all right for complacent Secretaries of State, who have not gone through the mill of such a crisis, to argue against that now. I had a great deal of sympathy with the


right hon. Member for Guildford when he was struggling through a crisis. Yet he immediately sought to use his power of royalty oil and turn it into barrels of oil to cover the United Kingdom market.
The argument against such a course put by the Secretary of State on Second Reading and by the Minister today is that it involves only a small percentage of oil—6·5 per cent. —because of the participation oil arrangements. I do not need to be converted to the value of participation oil. Indeed. I made a sporting effort to convert the Government to participation oil in the argument about oil and gas enterprise.
In 1979 there were such participation arrangements in place. The Secretary of State for Energy then had a productive oilfield as large as any Secretary of State for Energy will ever have in the late 1980s. The fallacy of the Minister's argument is that in handling an oil crisis such as that which occurred—even a bogus one—in 1979–80, it is not a question of the total amount of oil being produced but rather how much oil can be redirected at any time into the national oil market. It need only be, as it was in 1979–80 a fractional amount of oil. It was not the total amount of oil being produced in the North sea, put the percentage of oil, over which at that time the Secretary of State had a measure of control that was important.
The then Secretary of State deemed that the marginal amounts of royalty oil available during the 1979–80 crisis were most important, and a useful contribution. Those would be denied to a further Secretary of State for Energy if we continued the principles of the Bill. He will not have the right to have royalty oil in kind in 1989–90 out of these fields— which will be marginal, even with the great stimulation of oilfields that we can imagine—as he now has. Therefore, he is taking away, if we approve the Bill without modification, a useful power which, in 1979, the Secretary of State felt was not only useful but essential. He told the House then that this was one of the means by which he intended to handle the crisis. He was not talking about millions of tonnes but about small amounts of oil over which he had a measure of control at any given time.
Thus, it is not a question of the total amount of oil production but of the degree of control, and the power that the Secretary of State has at one moment in time to bring oil back into the United Kingdom market. One of the most simple ways to do that in 1979 was to exercise the right to call in royalty oil in kind, a principle and power that would be denied to a future Secretary of State in such a crisis if we approve the Bill unamended. I hope that the Minister will not return to these arguments again, unless he addresses himself to the specific point and case that I have made. It is not just a problem of amounts, but of access, availability, and capacity to control at any one moment a certain amount of oil.
There is also the problem of participation oil. The Minister has justified the happy abandonment of such power over royalty oil by saying that we have participation oil. I am glad that he is now a keen and enthusiastic supporter of participation oil. Some Conservative Members have not gone into the scheme as enthusiastically as I have. In fairness, the Minister spent a great deal of time on an earlier Bill trying to make sure that there were not large scale leakages on our rates of participation oil. However, there have been significant leakages as a result of the silly acts of privatisation.
In this connection, I have a simple question for the Minister. We have been reading in the press during the

recess reports that the Secretary of State has been reviewing BNOC (Trading) Ltd. There have been a few heavily-laden rumours that the Government intend to wind it up. BNOC (Trading) is the centrepiece of oil participation, and I hope that the Minister will give a categoric assurance on this matter and scotch rumours that he is reviewing more than certain aspects of the operations of the company. We are all interested in that and happy to investigate and inquire into such matters in detail. Is the Minister contemplating the abolition or the wind-up of BNOC (Trading)? Is that one of the possible actions that he is considering, as one of the press rumours is suggesting? If so, this is a serious issue. We have been asked to approve the Bill on the grounds that the successful participation arrangements are in place, and the organisation that understands participation is BNOC (Trading). If we are winding that up, what will be the effect on our participation arrangements?

Mr. Douglas: This is an important issue, because if there is any truth in these rumours, the House might have been in danger of being misled the other week when we discussed the setting up of Enterprise Oil and the disposal of the British Gas Corporation oil interests. If the winding-up of BNOC (Trading) was in the mind of the Minister he should have come clean with the House then.

Mr. Rowlands: I understand my hon. Friends point. I do not want to wander too widely because we shall have the opportunity to probe on other occasions. I read the order the other day with some interest, and as far as I can remember it said that it was BNOC (Trading) or another organisation that would control the participation rights. Although I looked at the order at the time, we did not have the opportunity to explore it. However, this is an important issue. I am worried about the slight qualification in the order. It may be that I have an over-suspicious mind, which led me to read the small print with too much care.
The simple way to scotch the rumours is for the Minister to say that, whatever review is taking place of BNOC (Trading), it is not a review to wind it up, and that he is not considering that possibility. If he is, we are in serious contention with him about participation. The relationship between this argument and the Bill is clear, and was properly made by the Minister. He said that we can afford to abolish royalty oil and to lose 6·5 per cent. control over oil supplies arising from the rights of royalty oil in kind because we have participation arrangements in place. They are in place in BNOC (Trading). However, even the Chancellor of the Exchequer, the Secretary of State's predecessor at the Department of Energy, contrary to the advice given to him by some of his hon. Friends, did not believe that the Government should abolish BNOC (Trading).
Central to the debates in Committee and to our case against the Bill in the form in which it is presented to us is its undiscriminating nature and character, which is not related to any field of any size or profitability in the North sea. This was a point that my hon. Friend the Member for Dunfermline, West (Mr. Douglas) made earlier when he intervened in my speech. Although the consensus is that there are no Ninians or Forties or large-scale fields left, anybody who says ever or never about oil discovery usually finds himself in an embarrassing position.
An example of this is the famous remark, made by Mr. Drake of BP in the early 1970s, that there was not much


oil in the North sea. He then had to admit to finding a large field. There should be no evers or nevers in our thinking, assessment or calculations. We have to think that the prospect might be, in the remaining areas of the North sea that we shall explore, that there will be substantial fields. There will be fields of varying sizes and different characters and to offer such undiscriminating relief across the board is nonsense.
Again, it is nonsense that we are asked to approve a Bill the financial consequences of which we do not know. It is literally a Bill asking for a blank cheque. We do not know how much it is. We probed in Committee, and again today in interventions we have asked about the order of the relief that we are volunteering. If the Minister of State cannot give us the figure on large developed fields, perhaps he can give it in general terms for some of the fields. Let us have rough and ready averages. We do not ask for disclosure of detailed commercial information, but the Minister should let us have some sort of assessment.
The Secretary of State gave an example on Second Reading. He spoke of a field with
reserves of about 55 million tonnes—a medium-sized field by the standard of existing fields—with a life of about 12 years". —[Official Report, 4 July 1983; Vol. 45, c. 26.]
He came to the conclusion that the benefit to be derived from developing that field was 3 per cent. of revenue, and was therefore worth £120 million. I think my calculation is right. That is a substantial relief for one field. The Clyde field, according to the 1983 Brown Book, has about 20·5 million tonnes, 150 million barrels. That is a substantial retrospective relief to Britoil for a field that has already been developed and which did not need such stimulation. Britoil was going ahead with the development of Clyde. irrespective of whether there was royalty relief, so this represents a happy, gratuitous windfall for the Government's new private creature called Britoil. We are right to argue that the House should not approve such totally undiscriminating provisions and underwrite blank cheques. We on the Labour Benches will not underwrite any such blank cheque, because that is one of our basic objections to the Bill.
The association that represents the industry, UKOOA, never asked for or expected the total abolition of royalty relief. It sought to relate royalty relief to the size of the field. We sought, in the sensible and pragmatic manner in which we have approached the Bill, to produce a discriminating scale of relief according to the size of the field.
The argument became more relevant when we probed the extension of the Bill to the southern basin. Oddly enough, some of us would support the idea of giving certain reliefs to small marginal fields in the southern basin. I do not believe that one can draw a firm line between all or nothing, as the Bill proposes. Although I understand the basic character and nature of the southern basin, as opposed to the North sea, I do not see why, if one wants to stimulate the development of marginal fields, some of the small marginal fields in the southern basin could not receive some form of stimulation, by tax relief or even by royalty remission in certain respects. I take a pragmatic approach to the matter.
The Government's case against our amendment for a royalty relief system related to the size of the field removes any opportuniy to deal with the southern basin in a

selective way. If the Government's arguments against a selective approach in the North sea are correct, presumably those arguments are valid for the southern basin also. One either has a selective approach to fields in the North sea or one does not. The Government will find themselves in a curious situation, coming under pressure from the oil industry and the various pressure groups that will raise the issue. The Government will be forced into the absurd and arbitrary position of deciding either to give no royalty remission at all to any of the southern basin fields, or giving it to them all.
We shall vehemently oppose total exemption or abolition of royalty relief for the remaining southern areas. We could have dealt with the marginal southern basin oil fields on a field-by-field basis, relating the relief, as UKOOA suggested, to the size of the field. However, the Government have turned their back on that proposal. They have deployed arguments that will apply, with equal validity, to the whole of the southern basin. I do not know how the Government will get themselves out of the fix that they are in. Why did they not accept some of the principles of our amendments and introduce a selective basis, north or south of the line proposed? We should have looked at that proposal sensitively and with interest. Strangely enough, the concept of remission of royalty relief on a field-by-field basis was written into the original Petroleum and Submarine Pipe-lines Act 1975. It was not an issue of principle. We were willing to be pragmatic on the matter, on a field-by-field basis, so as to help the development of some of the marginal fields.

Mr. Douglas: My hon. Friend speaks about the 1975 Act. Is he aware that those provisions were never triggered because no application was made by any oil company for that type of remission?

Mr. Rowlands: I take my hon. Friend's word for it. I was not a Minister of State in the Department of Energy at the time, so I do not know whether there were any applications. At that time I think I was dealing with issues such as Grenada and the Caribbean— sensitively and successfully, I might add—and the Falklands. We did not lose a single soldier. We did not get ourselves into the fix that this Government find themselves in.
The remission on a field-by-field basis in 1975 was a sensible and pragmatic approach, and we continue to hold that sensible and pragmatic approach. We do not support this all or nothing proposal.
In this context, I want to raise an important semi-constitutional point, of which I gave the Minister's Office advance notice, to ask him to comment in more detail on the discussions that we had in Committee, when the Minister was in a muddle about how the Finance Act 1983 and the Petroleum Royalties (Relief) Bill would be linked. The Minister did not deal with the matter in his opening remarks, so I hope that he will mention it in his conclusion. He said on that occasion:
There could be problems over it. It might be possible, but I cannot be certain. Therefore, there is some strength in the hon. Gentleman's argument". — [Official Report, Standing Committee A, 14 July 1983; c. 72.]
I hope that the Minister will give us a clear statement about the relationship between that part of clause 2 and the Finance Act 1983, and being able to change one piece of legislation by an action in another. It is an important matter on which he admitted that he was uncertain.
We have consistently argued—from the time that the Bill was mooted, on Second Reading, in Committee and


now on Third Reading—that there is a clear distinction between tax concessions and the abolition of royalty rights. That is why we argued that the issue of tax relief could be dealt with in one way, but that there should not be a blank cheque approach to the whole question of royalty reliefs for future North sea oilfields.
This Bill is yet another piece of legislation that will erode the nation's control over its precious oil assets. The first great act of vandalism was the destruction of the successful, vibrant and profitable British National Oil Corporation. It was the only corporation in the North sea that owed 100 per cent. allegiance to this nation, and it was destroyed by this Government. That was followed by the Government's wicked effort to break up the most successful partnership of BP and British Gas in developing Britain's most exciting on-shore oilfield at Wytch Farm. That oilfield is now being damaged and vandalised. That, in turn, has been followed by the petty and spiteful forced transfer of small but useful British Gas North sea oil assets to the so-called Enterprise Oil Corporation.
All those acts stem from the Government's pathological hatred of successful public enterprise. They do not stem from any sense of national interest or patriotism. All of them, in turn, have eroded important participation rights, and control over our oil. This Bill should be considered in the context of the Government's other actions. This measure, along with the others, will seriously undermine and erode this nation's controlling power over its most precious asset—North sea oil. For that reason, and the others I have outlined, I hope that hon. Members will tonight oppose and reject it.

Mr. T. H. H. Skeet: I do not wish to trespass for long on the time of the House, because we had an excellent innings in Committee. However, I have now had an opportunity to listen to the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands), who raised several interesting points. He mentioned as I did in Committee, that small and large fields are exempt from royalties under this Bill. In Committee, I raised that issue with the Minister and he said:
The provisions of the Bill are effective as long as the legislation stands. As my hon. Friend said in an intervention, that does not prevent future Governments from making that particular change through primary legislation.
I then intervened and said:
Any Finance Act in future could lead to a change." — [Official Report, Standing Committee A, 14 July 1983; c. 44.]
Therefore, there is no great anxiety. If there should, by some good fortune, be a large field, and if the Government decided to make changes to include it, that could be done at the time. I sought to secure an assurance from the Minister about how long the Bill would last. I wanted to know whether companies would be able to plan in the long or short term. However, quite rightly, he was not prepared to answer that point.

Mr. Rowlands: rose—

Mr. Skeet: The hon. Gentleman made a long speech, but I shall, of course, give way to him.

Mr. Rowlands: The hon. Gentleman has rightly addressed his remarks to the points that we raised. Presumably he is arguing that there should not be any stable arrangement, and that arrangements should be chopped and changed according to the discoveries made.
I thought that the burden of the Minister's case in all our deliberations was that the measure would produce certainty and stability.

Mr. Skeet: The hon. Gentleman must be aware of the evolution of oil taxation. There have been 11 legislative measures since 1975. In 1975 and 1983 there has been and will be oil taxation legislation. There have been seven Finance Acts relating to petroleum revenue tax or some element of taxation. In 1980 there was the Petroleum Revenue Tax Act and we now have the Petroleum Royalties (Relief) Bill. As there has been legislation almost every year, it would not be at all surprising if there was further legislation in about a year's time to cover any anomalies that are likely to arise.
The hon. Gentleman seems to forget that a long lead time is involved after an annexe B has been granted. The lead time is normally about eight years, and is made up of two to three years' appraisal, one year for obtaining the annexe B and three and a half years for development. The hon. Gentleman would have been on much stronger ground if he had referred to other matters. According to the newspapers a short while ago, the managing director of Esso Petroleum in the United Kingdom said:
Britain will need a further 90 oil and gas fields in the North Sea in addition to the present 40 if it is to stay self-sufficient beyond the end of the century.
Today, the Minister is prepared to say that the number coming forward is nothing like that. I believe that there were 10 fields for development on the plate in June 1983, with the possibility of others in future—another 15.
A similar point was taken up in the Daily Telegraph of 5 July 1983. Alexander Kemp, an Aberdeen university economics don said:
Nothing will prevent the production profile from falling, with all its serious implications for the balance of payments and tax revenues.
Thus, if there is a surge now, it will take a long time to translate itself into oil that comes out of the ground. Indeed, I believe that the Government recognise that. Unlike the Labour party when it was in power, the Government have got exploration moving.

Mr. Douglas: We all appreciate that the hon. Gentleman knows much about oil matters, but will he apply his mind to the fact that the Government are currently producing in excess of 2 million barrels per day? They are being profligate with existing fields. They have gone ahead with full bore production from the existing fields, and this sort of legislation is about two years too late.

Mr. Skeet: The previous Minister of State said that he had no intention of interfering in the rate of production. Indeed, Mr. Varley gave assurances at the time. The oil price is now declining largely because Dr. Otaiba has been unable to come to the United Kingdom to persuade the Secretary of State that the United Kingdom's production must be reined back. The Arab countries, including Iran and others in OPEC, have decided on quotas of 17·5 million barrels per day. However, they appear to be producing 18·5 million barrels per day, so there is a surplus. By actively producing as much oil as we can, a small country such as ours may cause some instability in the international market. Incidentally, some lowering of the oil price in the market helps all the countries in Europe and the Third world. My only anxiety is that I think that


the price should have fallen a little below $30 per barrel, but things did not turn out that way. However, I believe that the output that has been suggested is misconceived.

Mr. Douglas: We should all be indebted to the hon. Gentleman if he gave us his view of the statement made by Professor Odell concerning the long run future price of oil. He takes an extremely depressing view. Is the hon. Gentleman's view consistent with that of Professor Odell? It would be interesting to know, in the light of the Government's policy.

Mr. Skeet: The hon. Gentleman has played into my hands, as I have that article with me. It appeared in the Financial Times of 2 November 1983. Professor Odell said that a decline in the real price of oil during the next 30 years could be forecast. He said that oil could once again become attractive for generating electricity. He also mentioned the decline in the influence of OPEC and the weakness in the internatonal oil market. Does not the hon. Gentleman realise, however, that Professor Odell's argument defeats his point? If there is a surplus of oil on the oil market that will tend to keep prices down. In fact a commentator and financial analyst has said that the oil price for next year may not be good and may be as bad as in the first quarter of this year.
I should like to pursue a little further the interesting point about security. My right hon. Friend the Minister of State said in Committee — I did not necessarily agree with him but is was perfectly right for him to put it— that the 51 per cent. from the participation arrangements gives the Government all the security of supply that they require. My right hon. Friend is aware that, apart from that, the provisions of the Energy Act 1976 give him further security. The United Kingdom is the one country in western Europe, with the exception of Norway, that has a cast-iron position. It is a different angle of security that worries me. If we were engaged in a major world war most of the installations could be shot away, which would cause anxiety, but in a general conflagration there would be no security for anyone.
I referred earlier to the amount of legislation that has been passed. I mentioned the nine Acts since 1975. The Government have had a rethink on this, probably due to the work of UKOOA and the Treasury in getting together to bring about certain modifications. The provisions of the Finance Act 1983, the Petroleum Royalties (Relief) Bill and the Oil Taxation Bill should be read together and all inconsistencies in approach should be removed in a special effort to facilitate the development of marginal fields. As it now stands, the elimination of royalties in this Bill and the increase in the oil allowances in the Finance Act 1983 tend to be offset by the burdens placed on small field operators through the charge of non-oil receipts, particularly pipeline tariffs — a charge to petroleum revenue tax. The Oil Taxation Bill will cause distortion in the market and drive up tariffs, thus making certain small fields uneconomic to work.
Will the good work done in the Finance Act 1983 and in this Bill be considered in conjunction with the Oil Taxation Bill? Will they ride in harmony and not be inconsistent with each other? If they do not ride in harmony the operators on the continental shelf ask what is the point of going ahead with some of these projects and they may be severly discouraged.
I should like to endorse what the hon. Member for Merthyr Tydfil and Rhymney said about the southern basin. I have never been able to understand the Government's case for leaving that out. The sector was mentioned in the Finance Act 1983, but a gas province could contain oil. As I argued in Committee, oil was recovered in the Dutch sector and it is therefore likely that if we have intense exploration in the British sector a little more oil will be recovered.
I also argued in Committee—I think it should be reiterated today — that the price of gas will be determined by the amount of gas that is discovered on the continental shelf. Therefore, if companies are more forthcoming in their operations in this connection it is right that we should do something to erode the monopoly of the British Gas Corporation. It has already come up in price to 23p per therm but I say at once that that is not equivalent to price of oil. Will we rely too much on Norwegian supplies of gas or will we try to locate more of our own? Would not that aim be properly served if the southern basin was included in the provisions of the Bill? My right hon. Friend said that a committee was considering this and that it may be doing something about it, but may we have his immediate thoughts on the subject?
I do not want to say much more about the Bill as I have had a opportunity in Committee to voice my views, but I should like to mention oil prices. The oil price has been declining for some time in real terms. Mr. Edmund Dell spoke in 1975 about the justification for a reduction in petroleum revenue tax. He said that PRT would alter if there was a significant alteration in the real price of oil. He forecast that the oil price would go up and that PRT should be advanced. PRT has been advanced significantly. If the real price declines, it should fall. If the marginal fields are to be developed we must have the right fiscal system. Many of the fields will not be paying PRT but if the oil price is not right the oilfields will never come to fruition.
I compliment the Government on the Finance Act 1983 and the Petroleum Royalties (Relief) Bill. We must look carefully at the Oil Taxation Bill because it has certain inconsistent clauses. The three pieces of legislation must be read together. Modify those clauses. So far so good. This could lead to further developments in the North sea. We have already had a certain amount of encouragement and I hope it will continue.

Mr. James Wallace: It is a pleasure to follow in debate the hon. Member for Bedfordshire, North (Mr. Skeet). Because of my short experience in the House and as I hold the energy portfolio for my party I tend to encounter the same hon. Members, so I recognise the hon. Gentleman's long experience detailed knowledge of this subject. I was particularly interested in some of his comments about gas prices and gas exploration to which I shall return before I sit down.
When I spoke on Second Reading I said that I would be prepared to support the Bill because it was believed that, with the other fiscal measures of the Finance Act 1983 and the new Oil Taxation Bill, of which we have now had sight, it would encourage oil companies to undertake new exploration and development of the marginal fields not only in the North sea—we have tended today to talk about the North sea — but, as I understand the


geographical definitions in the Bill, in the west Shetland basin and the Orkney basin, where the possibilities are exciting for the years ahead.
There has been some evidence since Second Reading to support the optimism expressed at that time. The hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) pointed out that the Minister of State has been mentioning that to numerous newspapers. The available evidence gives the Minister of State some justification for that optimism. The most recent Wood Mackenzie report says:
Looking at the future, the level of activity in 1984 and 1985 could possibly attain a level never seen before".
The Wood Mackenzie report is not noted for hyperbole or the exuberance that one sometimes hears from politicians or Ministers of State.
It would be idle to speculate on the number or the nature of developments but it is clear that for several reasons the industry has emerged from the slacker times of more recent years. The Minister of State pointed out that some companies are coming up to the time to relinquish their licences and that therefore it is time that they did something. There has also been a more stable oil price regime than in recent months which has contributed to greater optimism. Another reason is the more favourable tax regime brought about by the measures introduced this year. I refer to a more favourable regime, but perhaps we may hope that we are coming to the stage when we can settle down to a more stable regime without the numerous changes we have seen in recent years.
It is important for us to look not only at events off-shore but to remember that any exploration and development activity off-shore means a consequent increase in activity on-shore. In my constituency, planning permission has recently been sought for a multi-million pound oil rig servicing and repair base near Lerwick in the hope and belief that Shetland's proximity to present and future oilfields will make such a facility attractive to the industry in terms of saving time and money. Lerwick has the advantage of being close and of having a harbour with deep water that is open for the majority of the year.
As exploration goes further north and west, the facilities available at the airports at Sumburgh, Scatsta and Unst can expect to be used more. The people in and around Sumburgh are grateful to the Civil Aviation Authority for taking steps, albeit belatedly, to reduce its landing charges. One might say that the reduction has been not nearly enough and comes too late, but it is a step in the right direction, following the great increase in charges in recent years, and it is hoped that as a result of that reduction, many more oil companies will be tempted to use the facilities at Sumburgh.
There are local examples of what increased activity in the North sea and the west Shetland basin can do for employment. That applies not only at the local level because increased activity in the North sea has ramifications throughout the national economy. It has been estimated that oil developments have contributed to about 100,000 jobs. Such employment and such future plans—for example, the oil rig servicing base—would be severely dashed if measures such as this Bill were lost and if there were any indication that the favourable tax regime that we have seen in recent months would be set back.
The lack of any projects being given development approval in the two years prior to the go-ahead to Clyde and Alwyn in the latter part of 1982—a lack due no

doubt to the tax system which then existed—has meant a lean time for platform construction yards; we have dealt with that to some extent in relation to Scott Lithgow. It is important that companies that have managed to survive through thick and thin, and particularly through the thin of recent years, are given the encouragement that the Bill will provide.
The official Opposition put forward an amendment in Committee to provide that the benefits of the Bill would be available only if a guarantee were given of a 75 per cent. take-up of British manufactured goods in subsequent developments. The House would not expect an hon. Member from the Liberal Bench to endorse such a blatantly protectionist proposal. Nevertheless, it has been established that about 75 per cent. of work generated onshore by North sea oil development goes to British firms. It is important that we give developers an opportunity to continue to provide that work and to make the necessary advances in technology, not only for our oil development but for the opportunities that are increasingly appearing overseas. The pace has quickened and measures such as this will help to ensure continuity of activity from exploration to development and on to production.
Another advantage of sitting on this Bench is that we have an opportunity to weigh up the arguments and vote on the merits. I accept what the hon. Member for Merthyr Tydfil and Rhymney said about the official Opposition not seeking to put a stopper on North sea oil development.. and I appreciate that the points advanced by Labour Members are not designed to be wrecking ones; I believe that they are anxious to give constructive assistance to the Government in this matter. It is important therefore that we listen to and study their arguments but, despite the eloquent manner in which the hon. Member for Merthyr Tydfil and Rhymney deployed his case, we on this Bench are not convinced.
I understood the hon. Gentleman to be challenging the Government in three main areas. The first was on the loss of revenue and the indiscriminate approach which, he alleged, the measure contained; the loss of royalties in kind; and—some time in Committee was spent on this —the handout that the Bill would give to the Clyde and Alwyn fields.
As for any loss of revenue — and the consistent pressing of the Government for more information—I have some sympathy for the Minister. As it is not clear what the benefits of the Bill will be in terms of the number of projects which will be developed which otherwise would not have been, it is almost impossible to make a quantification of the loss to the Treasury. Indeed, there could even be a gain. One does not need to be a mathematical high-flyer to appreciate that 89 per cent. of nothing is less than 88·5 per cent. of something.
The hon. Member for Merthyr Tydfil and Rhymney dealt at length with what he described as the indiscriminate nature of the benefits given by the Bill—that they could apply to a large oilfield, if such should be discovered, as to a small one—and he took the opportunity of my absence on honeymoon to point out an apparent inconsistency in the case which I adduced on Second Reading. I do not criticise him for doing that, but I do not retract from the view that there should be greater stability in the oil taxation regime than we have seen in recent years.
The Bill is designed to encourage activity in smaller and marginal fields, to persuade companies to go in for


exploring, drilling and subsequent development. It is clear that such exploration might not take place without a measure such as this.
If, at a later stage, a field of the size of Forties or Ninian should be discovered, it would not be unreasonable then, in a future Finance Bill, to take whatever action was thought necessary. After all, we are thinking of 1992–93. At that stage there could, if necessary, be a further Treasury cut because, an oil company having discovered a field of that proportion, it is unlikely that it would be unwilling to continue with its development. The Bill is designed to encourage the development of marginal fields.
As for royalties in kind, the hon. Member for Bedfordshire, North pointed out that there were already available to the Government numerous powers of direction and control in the event of an emergency. Only yesterday we passed a Bill through all its stages, which shows that if a real crisis arose there would be no problem in getting the necessary legislation through Parliament.
It is worth considering the way in which royalties are collected when payment is made in kind. I understand that it is taken as a straight 12·5 per cent. of total production. That having been collected, it is only subsequently, when the accounting takes place, that allowances can be set against that sum.
The cash remission for small marginal fields can often be quite sizeable. It is noticeable that the Government have chosen to exercise their option by taking payments in cash rather than in kind for small fields such as Argyll, Tartan or Auk. We shall not be losing all royalties because the Bill applies only to new fields. The 12·5 per cent. take from existing fields will not be affected.

Mr. Rowlands: Is the hon. Gentleman saying that the Liberal party does not believe in royalties in kind or in cash for any future North sea development?

Mr. Wallace: We support that which is set out in the Bill. For future North sea oilfields, excluding the southern basin, which is not included in the Bill, we do not, due to our support of the Bill, approve of collecting royalties in cash or in kind. However, if a field of significant proportions is discovered—for example, on a par with Brent or Forties — fiscal measures might be taken in future which would make up for not taking royalties from smaller fields.
The existing North sea oilfields, other than Clyde and Alwyn, are paying royalties either in cash or in kind. We support the continuation of those royalties.
In Committee there was reference to the gratuitous benefit that is being given to the Clyde and Alwyn fields because the Bill's provisions go back to 1982 rather than 1983. I regret that no satisfactory explanation was given by the Minister following the debate on that issue.

Mr. Douglas: Why did the hon. Gentleman not vote against the provisions for the Clyde and Alwyn fields?

Mr. Wallace: If the hon. Gentleman checks the Division list in Committee, he will find that I supported the amendment that was tabled by the hon. Member for Merthyr Tydfil and Rhymney. The terms of those provisions should not lead one to reject the entire Bill. However, one can be critical of the Government,

especially of the Minister, for not providing a reasonably satisfactory explanation. I do not accept that that criticism outweighs the merits of the rest of the Bill.
The Government could take steps other than those set out in the Bill to increase oil productivity and exploration in the North sea and in the west Shetland basin. Those in the oil industry are wondering when the Government will be granting new licences in the west Shetland basin. I hope that the Minister will indicate when the granting of those licences can be expected.
It is expected that in the not too distant future there will be a gap between our gas production and demand. This issue was raised by the hon. Member for Bedfordshire, North. What additional measures is the Minister proposing to maximise domestic gas production? Does the Department of Energy subscribe to the view that is current in the industry of pricing gas on a par with oil—about 32p per therm— or does the Minister propose to take other action to stimulate exploration—

Mr. Douglas: The Minister may subscribe to that view but he will not implement it.

Mr. Wallace: Indeed, the Minister may subscribe to the view but I cannot imagine that he will put it into practice. If he does not agree with that view, what other action does he propose to stimulate exploration and prevent importation at what could be even higher prices if we had to buy on the world market? Would he be prepared to allow the British Gas Corporation—is this current policy in the Department — to seek licences outwith the southern basin? The impression that is created by the corporation's annual report is that the previous Secretary of State directed it to concentrate its activities in the principal gas areas. I hope that the Minister of State will tell us whether that is still the Department's policy, or whether the new broom that is sweeping through the Department will allow the corporation to continue to have a wide variety of interests around our shores.
Will the funds that are generated by Enterprise Oil be returned in some way to the corporation to allow further exploration to take place? I appreciate that there is only a faint chance that that will happen, but we can always live in hope.
In Committee the hon. Member for Merthyr Tydfil and Rhymney said that I had been fairly slavish towards the oil industry on Second Reading. It is easy in politics to knock the oil industry. It does not have a great number of friends among the electorate. However, it is always somewhat difficult readily to come to its support and assistance. I support the Government, as I support previous Governments formed by both the Conservative and Labour parties who have dealt with the oil industry to date, and as I also support the local authorities, including the two authorities in my constituency which have tried to drive a tough bargain with oil companies. I doubt whether the companies would expect anything less. However, we must be realistic. An army of civil servants would not get the oil out of the ground but the oil companies will do so. They will do so only if we drive a fair bargain as well as a tough one. My right hon. and hon. Friends will support the Bill because we believe that it will encourage the companies to get oil out of the ground which otherwise might not be extracted.

Mr. John Hannam: I welcome the speech of the hon. Member for Orkney and Shetland (Mr. Wallace), for I think that he accepts the principles, which I accept, which are laid out in the Bill. In forming a conclusion on this measure it is necessary to consider oil and gas resources and developments overall. We have in reserve or under development about 11 billion barrels of oil in 28 fields. Those fields have already been found and they are being developed. On average each field can be expected to produce about 400 million barrels. Almost 4 billion of the original 11 billion barrels have been produced. We are quickly using up the remaining 7 billion barrels.
The next category consists of probable developments. These fields could be developed after additional studies and evaluations have been undertaken. In this category there are about 1 billion barrels in 10 fields. There is an average of about 100 million barrels in each field. This means that each field is about one quarter of the size of the first 28 fields.
In addition, there are about 3 billion barrels of proven oil on the continental shelf whose development is pretty uncertain. There are about 60 fields in this category and it will probably be necessary to develop these reserves. The average capacity will be about 50 million barrels per field.
Those are the three categories of proven oil in the North sea, but in looking 20 or 30 years on—this is the area which we are beginning to consider in the light of tax changes and the need to create incentives for aggressive exploration—there are probably another 8 billion barrels available if we achieve the target of further successful development.
As the smaller and deeper fields come to be developed, costs are certain to rise sharply and, accordingly, profits will diminish. The Government's proposals — I think that we all agree with them in broad terms — will encourage the exploration and development of the increasingly marginal fields. The royalty concession is needed for it is based on the gross sales revenue of a field and not on that field's profits. A royalty could be due even if a small field made little or no profit. If we do not abolish this royalty, small fields could be unduly burdened by this taxation. This a logical and sensible step to take.
If this country is to maintain oil self-sufficiency throughout the 1990s, there should be continued exploration and development during the remainder of the 1980s. The pre-Budget tax regime offered little or no incentive for the small fields or those producing fewer than 150 million barrels. Most of our developments are probably capable of producing 50 million or 100 million barrels. Therefore, I support the package of tax and royalty changes.
Several hon. Members have pointed out that the concessions will not apply to gasfields and to the southern basin.

Mr. Rowlands: Recognising the importance of the way in which a royalty bears on an oilfield, it is a fact that UKOOA saw a way in which there could be a discriminating arrangement on royalty relief based on field size. That has not been invalidated in any way by the hon. Gentleman's argument.

Mr. Hannam: It would be true to say that the Government's decision to eliminate the royalty was an

agreeable surprise to the oil industry and one which it welcomed. Nevertheless, it is the correct decision if we look at the development pattern of the ever-diminishing fields. I believe that the Government made the correct decision, rather than involving themselves in a complicated system of variable royalty relief.
In one or two years, it will become increasingly apparent that similar tax relief will be needed for gasfields north of the southern basin line—and probably also for the smaller fields in the southern basin. The hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) mentioned this possibility. During the 1970s, about 33 trillion cu ft of gas were discovered in the North sea—I include the Frigg field where 60 per cent. of the 8 trillion cu ft field lay in the Norwegian sector. At the rate of consumption in 1970, that gas was expected to last for about 60 years. Therefore. there was no great panic about future exploration and development.
Since then our rate of consumption has increased from 5 per cent. to 25 per cent. of United Kingdom primary energy consumption. One reason is the low price of gas compared with other energy fuels. The low price being offered to gas producers by the monopoly buyer, British Gas, meant that there was virtually no gas exploration by the private sector for about 12 years until the beginning of the 1980s. Gas exploration dropped from more than 30 wells a year in the late 1960s to five or six a year in the 1970s. It ceased entirely in 1979 and 1980. Exploration picked up again in 1981–82 due to the higher prices being offered by British Gas.
At present customers are paying 32p a therm for gas and British Gas is still paying only an average of 12p a therm to producers. This will certainly change dramatically as a major shortfall of gas develops in our gas supply in the early 1990s. To obtain new suppliers, a much higher price must be paid to the producers, and therefore either the price to the consumers must rise to cover it—that will cause inflationary damage to the economy — or something must be done about the tax regime.
To obtain new gas the British Gas Corporation is already having to offer a price well above the 12p a therm average cost. The corporation is now offering 22p or 23p for new supplies. There are three reasons for the higher price. First, new supplies are needed in a hurry; secondly, there are higher costs to produce the gas; thirdly, there are much higher taxes on the producers, which means that they have to ask for more.
It has become increasingly evident over the past two years that the lack of exploration for new gas reserves could not continue much longer without serious shortages developing. The available firm gas supply which BGC has under contract from existing fields amounts to 25 trillion cu ft. This gas peaks out in the late 1980s, and then declines rapidly. A shortfall in supply from contracted supplies starts to appear in about 1990 and rapidly becomes worse.
We need to look ahead 25 years because of the time it takes to find, develop and produce new gas. The BGC needs about 30 trillion cu ft of new gas to carry it through this period. Most of this new gas will have to come from offshore fields.
The known but undeveloped reserves in the British sector total about 15 trillion cu ft. There are seven in the southern basin, five in the central North sea, two in the


northern area and one in Morecambe bay. The Norwegian undeveloped reserves are much larger. The Troll field alone has more than 30 trillion cu ft in its reserves.
Because of the developing supply, British Gas has decided to negotiate with the Norwegians to buy gas from the Sleipner field. The price will be high—probably about 32p a therm— because the corporation will be competing with other European buyers willing to pay that sort of price. If this deal goes through, the British economy will obtain no benefits in the form of tax revenue from the field profits and probably limited opportunities for jobs to develop and operate what will be a Norwegian sector field. If the Norwegian gas is not obtained, the BGC has said that Dutch, or even Russian, supplies could be contemplated.
Does Britain need to buy Norwegian or anybody else's gas? I believe that much more gas could be found in British waters with the type of aggressive exploration that we are encouraging. We could probably produce sufficient to meet all of Britain's needs without resorting to foreign sources. Producers will need either tax incentives or more than the 22p a therm which the BGC is beginning to offer. One reason is that the new gasfields will have to pay a much higher tax than the old ones under the present tax regime.

Mr. Wallace: Does the hon. Gentleman agree that because of too aggressive an attitude, gas exploration, inshore or offshore, which he considers necessary, has been much imperilled? Could that occur now, because of the Government's attitude to the privatisation of BGC assets has in many respects shattered morale among geologists and exploration teams in the BGC?

Mr. Hannam: I take the opposite view. The feeling in the oil and gas industry is that because of the breaking of the monopoly, which we are endeavouring to achieve, there is a new wave of enthusiasm for exploration and development of gas reserves. I am trying to point out why we may be imperilling the new dynamism in gas exploration and development which is essential for the future. The main crisis in the future will stem from the huge shortfall of gas which is looming up in the 1990s after the vast increase in the number of gas consumers during the past 12 to 15 years.

Mr. Skeet: If the Government, through the Oil Taxation Bill, are to cause pipeline tariffs to be subject to petroleum revenue tax, will this encourage many people who are not deriving any profit to find more gas?

Mr. Hannam: There is a rapid development of gas pipelines through the various consortia which is enabling them to get their associated gas brought ashore. This is a healthy development. If we see the same type of encouragement throughout the gas industry in the northern areas, we shall see a sharp improvement in the production of gas. Originally gas production from the southern basin and Frigg was exempt from petroleum revenue tax. The Government take then was a relatively modest 53 per cent. Subsequently the Government decided that new gasfields should pay the same taxes as apply to oil production. That means that the Government will take about 70 to 80 per cent. of the profit from any substantial new fields in the central and northern areas. The take will be even higher —75 per cent. to 85 per cent.—from any new fields

found in the southern gas basin. As one knows from previous debates, the recent tax improvements for new fields did not extend to that area.
The key issue is how British Gas will obtain its supplies for the 1990s and beyond. Should foreign supplies be sought which will cost about 32p a therm? That will certainly push up gas prices to consumers and will not do a great deal of good for the British economy. Alternatively, should there be a maximum effort to find and produce British gas? If so, it will require more incentives for the producers. There are two choices available. First, the price paid to British producers could also be increased to 32p per therm which, as with foreign gas, would push up prices to consumers but at least most of that higher price will end as tax and be recycled in the economy. Alternatively, the price paid by British Gas could remain low, as it has in the past, in which case, if we want to avoid the effects of a sharp rise in gas prices, lower taxes must be applied to gas exploration.
It is important to know whether the Minister can say anything about how we may include the new gasfields and gas exploration in what will be difficult areas in the central and northern North sea in the general tax regime. I hope that a conclusion will be reached within the next year or two to encourage the exploration for and development of gas in the North sea.

Mr. Rowlands: I have been following the hon. Gentleman's case with a good deal of attention. Although we would be willing to consider the matter field by field for some form of royalty relief extension, we would not support the blanket extension of this provision to the southern fields. I assume that the hon. Gentleman understood my point.

Mr. Hannam: Yes. I did not mean to imply that the hon. Gentleman supported that contention. He mentioned the problem of the southern basin in relation to the small gasfields. I believe that the gas is available, but that we may not get it out. There is very little activity in the more difficult northern areas, and if we do not encourage it by a severe price hike—and the British economy does not want that—then it has to be by bringing the same tax regime to bear on gas as on the oil producers.
While fully supporting the Bill, I hope that the Government will bring their mind to bear upon the looming problem of gas supplies.

Dr. Norman A. Godman: My immediate interest is the construction of structures within the offshore engineering industry. I believe that I am right when I say that the Minister recently made a number of observations about the generation of orders for the industry stemming from the Government's actions. What likelihood is there of orders for floating oil production platforms being placed in the near future vis-a-vis the development of the smaller fields where profit margins are less certain and narrower? What is his Department's view on the development of the concept of the single well oil production system? I should be grateful for some response by the Minister to those two questions.

Mr. Alistair Burt: I am grateful for the opportunity to address the House on a technical matter


from a slightly different point of view. This is a technical Bill, and we have heard the technical points argued most ably by hon. Members on both sides of the House.
The principles underlying the Bill are clear and understandable and they will receive greater support from the public if they are understood in that way. I speak on the wider principles of the Bill rather than the technical aspects. The Bill encourages the extraction of oil, which will be of benefit to the community, industry generally and those industries which depend upon oil extraction and energy in particular. I should like to take two views—first, as a Member for an industrial constituency where energy is most important, and secondly, as a younger, newer Member of the House, where long-term energy interests are, I hope, coincidental with a personal lifespan.
My constituency has made paper its major industry. That industry is an extremely high user of energy and has been hard hit recently by rising energy costs. There are many reasons for this but a major cause was the oil crisis of the 1970s. It is my interest in energy prices and oil shortages that prompts me to speak. The hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) will recall the feeling of the House and the problems it had when dealing with the 1979 oil crisis to which he referred. I can comment upon what that oil crisis meant to industry in my area. The central purpose of the Bill is to encourage the extraction of oil and to try to prevent such a crisis recurring.
The oil crisis and resulting higher prices meant that the paper industry in Bury has been curtailed drastically. It has lost many men, and factories have closed. Therefore there are two points in the Bill of which I have taken note and in which I am interested. The first is the guarantee of security of supply. Recently the oil industry trends and energy demand have been notoriously difficult to predict.
My hon. Friend the Member for Exeter (Mr. Hannam) mentioned the increased demand for gas, which shows what can happen to even the best laid plans. Demand, which was expected to he stable, rocketed suddenly and there was a crisis. If that happens again supplies of the fuel may suddenly run out. Although it is difficult to predict what may happen to oil supplies, unless oil extraction is encouraged we face a shortage. I am persuaded by the Government's arguments on guaranteeing security of supply. There is no better way to prevent the discovery of oil than to make on those who might find it demands that discourage them from looking for it in the first place. The Bill's central aim is to encourage the companies to look for oil and to develop their finds. That will have benefits not only for industry in general and industries in my town but for the people in the onshore developments who supply the oil industry. Those particular interests have already been mentioned by several hon. Members, including the hon. Member for Orkney and Shetland (Mr. Wallace).
How are those interests to be preserved and how will the construction element of the onshore energy industry be encouraged if those who go out to look for the oil are not similarly encouraged? Disregarding the technical arguments that we have heard, the Bill's central principle, understandable to all, is that the Government are looking for a way to encourage those who want to extract oil for the benefit of all.
The second principle of the Bill which persuades me to support it is the Government's consideration in last year's review of the fiscal regime and its effect. The Government would have been irresponsible and would have failed in

their duty if, having looked at the tax regime and decided that some areas that had been profitable to the oil companies were no longer so, they had not taken the steps contained in the Bill to rectify the problem. Last year's review pointed to difficulties and showed that oil companies would have been in serious trouble if they had tried to develop marginal fields. Areas of exploration would not have been touched. Again, mindful of the problems caused by the oil crisis, the Government acted correctly.
Governments may have ideals that are not always adhered to, but when a possible crisis point is identified they must act.
It is in my interest to take a long-term view. Governments who fail to have a long-term view are failing in their duty. In this case, the Government have identified a possible oil shortage which could cause another crisis, the effect of which might be to push the price of energy still higher at a cost of yet more jobs in my town. I commend the Government for taking the action that they have in order to avoid such a crisis. They have looked at what should be done and have acted. That is the point of government and it is eminently proved by the Bill.
It is not often that the people of Bury pay great attention to petroleum royalties and their consequences. They are not matters that are often on their minds. However, in this instance they have been constantly on the minds of some workers because of the problems that I have described. The difficulties created by an oil crisis are long lasting throughout the world. They debilitate industries that rely on a plentiful supply of energy at a price that is comparable with prices abroad.
If the Government, through the Bill, act to avert an oil shortage in Britain, to protect and encourage the oil industry and to encourage those who extract oil to use British equipment, they will have done a fine job. I am happy to support the Bill.

Mr. Buchanan-Smith: With the leave of the House I am delighted to respond to the useful debate that we have had. Some of the topics have been thoroughly debated previously, both on Second Reading and in Committee. Having had so many detailed debates in Committee, it is to the benefit of those hon. Members who were not fortunate enough to be selected to serve on the Committee to be able to discuss again some points in the final stages of the Bill.
The hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) made several points. One, of considerable importance, concerned the future of BNOC. The review of its activities was announced by my right hon. Friend the then Secretary of State for Energy and related to the way in which it conducts its functions and is not a fundamental reappraisal of BNOC. From our experiences earlier this year, in March, at the time of the price crisis, I believed, as did my right hon. Friend, that BNOC's functions and the way they were carried out were to be tested. In general, to its credit, BNOC reacted. Having had occasion to use its powers in difficult conditions, it would be foolish not to carry out a review to see whether any lessons could be learnt in order to meet a similar situation in future. That is why the review is being carried out.
I was flattered to hear the extent to which the hon. Member for Merthyr Tydfil and Rhymney has been


reading my speeches lately, but I am sorry that he has not read everything that I have said. I have been careful to point out that we are not questioning BNOC's basic functions, simply the carrying out of those functions.
The hon. Gentleman also asked me about the British Gas Corporation's disposal directions that were debated earlier.

Mr. Rowlands: I thank the right hon. Gentleman for the satisfactory assurance that the Government are not considering the abolition of BNOC, but when will the review be completed and when will he come to the Dispatch Box to tell us about it?

Mr. Buchanan-Smith: I cannot say exactly. I can only say it is well advanced. It is a joint review, carried out by my Department and others within the organisation. Discussions are taking place. The review is not being carried out without the participation of BNOC and I hope that it will be completed before long.
The hon. Gentleman asked about the BGC's disposal directions and participation by BNOC or any other body on behalf of the Government. Again, he tried to make out that the Government might have had some insidious intention. In fact, that definition of participation was lifted from the Labour Government's Participation Agreements Act 1978 and, if there is anything insidious in it, it was present while the Labour party was in office.
The hon. Gentleman also asked about the extension of royalty relief to the southern basin. The extension to the southern basin is still under consideration and is the subject of discussions between the industry and my right hon. Friends in the Treasury. They have not yet come to a conclusion and their result will be announced in due course. We have also invited further information on particular points that have been raised. I know that my right hon. Friends in the Treasury will be ready to listen to any further arguments that may be put forward by those who have interests in the southern basin.
Again, I must emphasise that we are undertaking the review in response to the industry and we need to be persuaded of the need for change. No decision has yet been reached. If a future Finance Act extended the definition of relevant new fields to the southern basin, royalty relief would automatically apply. Clause 1(4) has been drafted specifically to ensure that. Its purpose is that if, following the present review, a case were established to extend relief to the southern basin, as well as elsewhere in the United Kingdom and on the continental shelf, only one piece of legislation would be needed. However, if, following the review, a case were established for giving some relief but not the total amount, legislation would need to be drafted to give that relief by means other than extension of the definition. Therefore, extension of the definition will apply only if it is a total extension—

Mr. Rowlands: All or nothing.

Mr. Buchanan-Smith: It is all or nothing. However, the Government's hands are not tied if they are persuaded that another approach is needed.
The hon. Gentleman also referred to the wider question of security of supply. I listened carefully to what he said. He referred to the BNOC particpation agreements and the figure of 51 per cent. I believe the change to be relatively marginal. There is no attack on the security of supply.
I have always said that there is a reduction in the amount of oil that can be used. However, as my hon. Friend the Member for Bury, North (Mr. Burt) said, what matters at the end of the day is the availability of oil in a form in which it can be used, whether at the pumps or as fuel oil. Participation and the payment of royalties agreements ensure the availability of crude oil. However, one has to bear in mind that for proper reasons, which I do not believe the hon. Gentleman would dissent from, BNOC, like any other company in that situation, enters into contracts for crude oil. The oil will not be available anyway because of the commitment that has been rightly made. The change is marginal for crude oil. As the hon. Member for Orkney and Shetland (Mr. Wallace) said, at one extreme, the Government must take special powers. Another measure has been tabled, covering security of supply, whereby certain companies are obliged to hold supplies for a certain period. That is the supply of oil products in a form in which the public and industry can use them. If we are talking about security of supply, we should deal with the matter in that context.

Mr. Rowlands: Why did the previous Secretary of State turn to royalty oil as the most useful, immediate and helpful way in which to deal with an oil shortage and crisis?

Mr. Buchanan-Smith: No situation is identical with another.
We do not believe that our assessment will necessarily have an effect. The hon. Gentleman tried to make a comparison between 1979 and what might happen in the future. It is easy to do so, and I say so advisedly. However, the hon. Gentleman forgets that we were just coming to the end of a period of price controls under the Labour Government, which had a considerable effect on those who chose to export oil in other ways, and exacerbated the crisis. One cannot make that comparison.

Mr. Rowlands: I did not use that argument.

Mr. Buchanan-Smith: The hon. Gentleman may not have used the argument, but it should be considered. The change that has been made on security is minor and will not have a serious effect.
I refer to the southern part of the North sea. My hon. Friend the Member for Exeter (Mr. Hannam) referred to future gas supplies. This is not the time to have a wide-ranging debate. That is a matter for commercial negotiation between the British Gas Corporation and the industry and, in the Norwegian sector, with Statoil, about the possibilities of further aupplies from there. I listened carefully to what my hon. Friend said. Perhaps this is not the most important point, but one must remember that we are moving forward. In recent weeks I have approved the new generation of condensate gasfields in the North sea, including North Brae. Until now we have talked largely in terms of the natural gas supplies from the southern basin, which will continue, but there will be more supplies from other areas of the North sea. There is an improvement in supply within the United Kingdom continental shelf, although I appreciate the argument that if higher prices are agreed as a result of other circumstances that will stimulate further development.
What happens in the southern basin of the North sea is of considerable significance. When I came to office I had before me four annexe B developments. I have already


approved two of the gas developments and I hope to approve another two before the end of this year. There is a considerable number of blocks in the eighth licensing round, which include areas in the southern basin that were excluded from earlier rounds. I am encouraged, from the interest in that licensing round and from the amount of drilling and exploration, by the fact that there is much interest in the southern basin which will lead to further gas supplies from that area. One or two companies in my constituency in Aberdeen have started strengthening some of their teams working in such places as Yarmouth. There is firm evidence of greater interest in the southern basin.

Mr. Skeet: Why does it take so long to get an annexe B?

Mr. Buchanan-Smith: If an annexe B is well prepared and well presented, I hope that it will not take too long. I have considered the matter and I am concerned about it. I have recent experience of it. I have a particular task on annexe Bs. One wants the development to go ahead in a form that is of benefit to the United Kingdom. If the criteria are met, I am happy and I hope that the company is, too. However, as my hon. Friend fairly said, the procedure for annexe Bs is only a small part of the total process. I have urged companies with proposals for development to talk informally to us at an early stage so that the formal stage can be as short as possible and so that the difficulties and problems can be resolved. That is already the practice of many companies. I want to encourage that. I shall do what I can, to the best of my ability, to process the annexe Bs as soon as possible.
The hon. Member for Greenock and Port Glasgow (Dr. Godman) referred to the single well oil production system. I have a proposal from British Petroleum before me at the moment. I hope that we shall be able to clear that annexe B proposal before the end of the year.

Mr. Douglas: The Minister will be aware, when referring to SWOPS, that the proposed development is for a ship-shape vessel, which is shipyard work. Will he ensure that that work is placed with a United Kingdom shipyard because yards in the lower Clyde require that work?

Mr. Buchanan-Smith: I cannot comment on that matter because it awaits my consideration. I refer the hon. Gentleman to my earlier remarks about procurement policy.
The hon. Member for Greenock and Port Glasgow also referred to the amount of work that is available. I am conscious of the fact that such work relates to construction yards and not just to those shipyards which have adapted themselves to such work. I have visited yards in England and Scotland and, although some yards can see that more work will be forthcoming, they are suffering from a gap in the continuity of work at present, and perhaps in the coming months.
There have been developments by British Gas in its structures and superstructures for the Morecambe bay project, and the Rough project, which did not come within the terms of annexe B, although I approved that development. That is generating some work. The Clyde and Alwyn projects are at a fairly advanced stage and I hope that they will help to fill the gap, although the British yards must compete for those contracts. Although that work is not immediately available, it will be available in the middle term rather than the long-term future. I have

spoken to members of management and shop stewards in the relevant yards and I am conscious of the anxieties about the gap in the coming months. However, work will be available in the interim, and I hope that the yards will benefit from it.
My hon. Friend the Member for Bedfordshire, North (Mr. Skeet) referred in his constructive speech to the measures that the Government have approved in the Bill, in the earlier Finance Act and in the Bill tabled for First Reading on 26 October. I cannot anticipate what will he said in the debate on the other Bill, but I believe that the measures are compatible. The Government are seeking to achieve the best way of sharing assets and the most economic way of using resources. If my hon. Friend the Member for Bedfordshire, North thinks that the Government are wrong, he will have an opportunity to express his views in later debates, but I assure him that we regard those proposals in the context of the policy which is behind this Bill and the legislation introduced earlier in the year.

Mr. Skeet: In a marginal field, a pipeline tariff which is subject to petroleum revenue tax will distort the market. Moreover, the tariff will be doubled because it must be recouped by the relevant company. That will put a great strain on the marginal field producer. Could that matter be reconsidered and receipts which are non-oil payments be treated specially and not in the way outlined in the Bill?

Mr. Buchanan-Smith: This is not the time to debate a Bill which has not yet come before the House, but I am grateful to my hon. Friend for giving notice of the topics that he will raise on that Bill. I assure my hon. Friend that we shall examine the subject closely before the Bill is presented to the House.
As the hon. Member for Merthyr Tydfil and Rhymney made a long speech, he may have been slightly inconsistent in what he said. I was interested when he raised questions on the depletion oil policy. I wondered whether he was questioning the assurances given by his party when in office. We are operating under the same assurances as were given by the Labour Government. If the Opposition are changing their policy, I should be interested to hear it. I hope that the hon. Gentleman will support us.
In Committee, the hon. Member for Merthyr Tydfil and Rhymney fairly and properly debated the more dogmatic subject of the status of royalties. I do not disagree with the hon. Gentleman's analysis of the importance of royalties which give the nation a return on an asset which fundamentally belongs to the nation. The use of royalties as the correct way to proceed is a fair and respectable point of view. I do not rely on doctrinaire or historical arguments. Like the hon. Member for Orkney and Shetland, I tend to take a pragmatic view. As my hon. Friend the Member for Exeter said, we must consider the effect of certain fiscal measures on the rate of exploration in the industry and the benefits to the United Kingdom economy. The conclusion of a recent review was that, without the combination of fiscal measures and royalties the development of the marginal fields would not take place, production would not continue at the rate which we believe to be in the best interests of the United Kingdom, and, most important, the continuity of work in our supply industry would be affected.
As I explained more fully in Committee, in dealing with the new marginal fields the Government are trying to


remove the forward loading of fiscal measures when a field is in its early stage of development. The forward loading and especially royalties levied at a flat rate throughout the process are precisely the measures which would discourage future developments. That state of affairs was satisfactory when large fields were involved.
Like the hon. Member for Dunfermline, West (Mr. Douglas), I hope that further large fields will be discovered but it is not possible to predict whether they will be discovered. If we are fortunate enough to discover a large field in the North sea we must not lose the chance of developing it. If we do not take the opportunity, development may take place in other parts of the world. We must maintain the continuity of development in the North sea. I believe that the Government can help by relieving the forward loading and carefully considering the allowances given against PRT. We regard the abolition of royalties as part of such a package which will ensure that the development of such fields is not hindered at an early stage.

Mr. Rowlands: I remind the right hon. Gentleman that the Government's track record of 12 tax changes in four years almost brought North sea oil development to a standstill.

Mr. Buchanan-Smith: I note how quickly the hon. Gentleman changes his ground. He cannot have it both ways. He says that we must get the maximum benefit from North sea oil and that the Revenue must obtain as much money as possible, but at the same time he denies the Government the right to change the arrangements. There will always have to be changes to reflect the changing situation. We are dealing with a natural resource and with physical conditions. As we move into new areas. we shall face new problems and situations. It is, therefore, totally unrealistic of the hon. Gentleman to suggest that we can have one tax regime for a whole decade.
If we genuinely believe in continuity in North sea development, that we are past the early stages and entering a new era, we must accept that we shall be dealing with more difficult and marginal fields as well as new technologies. A Government who failed to respond to that would be failing in their duty to the nation.
Like the hon. Members for Orkney and Shetland and Greenock and Port Glasgow, I represent a constituency in an oil area. We want to see continuity for the supply industry onshore as well as offshore. By proposing the Bill, we ensure that continuity, jobs and a British stake in the offshore industry, not only in the United Kingdom but elsewhere. By opposing the Bill, the Opposition will be acting against the interests of those involved in the industry.

Question put, That the Bill be now read the Third time:—

The House divided: Ayes 221, Noes 117.

Division No. 58]
[6.41 pm


Ayes


Aitken, Jonathan
Atkins, Rt Hon Sir H.


Alton, David
Atkins, Robert (South Ribble)


Amess, David
Baker, Nicholas (N Dorset)


Ancram, Michael
Banks, Robert (Harrogate)


Ashby, David
Batiste, Spencer


Ashdown, Paddy
Beaumont-Dark, Anthony


Aspinwall, Jack
Beith, A. J.





Bellingham, Henry
Hawksley, Warren


Bennett, Sir Frederic (T'bay)
Hayes, J.


Benyon, William
Hayhoe, Barney


Berry, Sir Anthony
Hayward, Robert


Bevan, David Gilroy
Heathcoat-Amory, David


Biffen, Rt Hon John
Heddle, John


Biggs-Davison, Sir John
Henderson, Barry


Blaker, Rt Hon Sir Peter
Hickmet, Richard


Body, Richard
Higgins, Rt Hon Terence L.


Boscawen, Hon Robert
Hind, Kenneth


Bottomley, Peter
Hirst, Michael


Bowden, A. (Brighton K'to'n)
Hogg, Hon Douglas (Gr'th'm)


Braine, Sir Bernard
Holland, Sir Philip (Gedling)


Brandon-Bravo, Martin
Holt, Richard


Bright, Graham
Hooson, Tom


Brooke, Hon Peter
Howard, Michael


Brown, M. (Brigg &amp; Cl'thpes)
Howarth, Gerald (Cannock)


Browne, John
Howell, Rt Hon D. (G'ldford)


Bruce, Malcolm
Howell, Ralph (N Norfolk)


Bruinvels, Peter
Hughes, Simon (Southwark)


Buchanan-Smith, Rt Hon A.
Hunter, Andrew


Buck, Sir Antony
Jenkin, Rt Hon Patrick


Budgen, Nick
Jenkins, Rt Hon Roy (Hillh'd)


Bulmer, Esmond
Jessel, Toby


Burt, Alistair
Johnson-Smith, Sir Geoffrey


Butterfill, John
Johnston, Russell


Carlile, Alexander (Montg'y)
Jones, Gwilym (Cardiff N)


Carlisle, John (N Luton)
Jones, Robert (W Herts)


Channon, Rt Hon Paul
Kershaw, Sir Anthony


Chapman, Sydney
Key, Robert


Chope, Christopher
King, Roger (B'ham N'field)


Clark, Hon A. (Plym'th S'n)
Knight, Gregory (Derby N)


Clark, Sir W. (Croydon S)
Knight, Mrs Jill (Edgbaston)


Clegg, Sir Walter
Knowles, Michael


Colvin, Michael
Lang, Ian


Conway, Derek
Lawler, Geoffrey


Coombs, Simon
Lawrence, Ivan


Cope, John
Leigh, Edward (Gainsbor'gh)


Couchman, James
Lester, Jim


Cranborne, Viscount
Lewis, Sir Kenneth (Stamf'd)


Dickens, Geoffrey
Lilley, Peter


Dicks, T.
Lord, Michael


Dorrell, Stephen
Lyell, Nicholas


Douglas-Hamilton, Lord J.
McCurley, Mrs Anna


Dover, Denshore
Macfarlane, Neil


Dykes, Hugh
MacKay, Andrew (Berkshire)


Eggar, Tim
MacKay, John (Argyll &amp; Bute)


Emery, Sir Peter
Maclean, David John.


Evennett, David
Maclennan, Robert


Eyre, Reginald
McQuarrie, Albert


Fairbairn, Nicholas
Malins, Humfrey


Fallon, Michael
Malone, Gerald


Favell, Anthony
Maples, John


Fookes, Miss Janet
Marlow, Antony


Forman, Nigel
Mather, Carol


Forsyth, Michael (Stirling)
Mawhinney, Dr Brian


Forth, Eric
Maxwell-Hyslop, Robin


Fowler, Rt Hon Norman
Mayhew, Sir Patrick


Fox, Marcus
Meadowcroft, Michael


Fraser, Peter (Angus East)
Mellor, David


Freeman, Roger
Merchant, Piers


Gale, Roger
Meyer, Sir Anthony


Galley, Roy
Miller, Hal (B'grove)


Gardiner, George (Reigate)
Mills, Iain (Meriden)


Garel-Jones, Tristan
Moate, Roger


Goodhart, Sir Philip
Morrison, Hon C. (Devizes)


Gower, Sir Raymond
Morrison, Hon P. (Chester)


Greenway, Harry
Moynihan, Hon C.


Griffiths, Peter (Portsm'th N)
Neale, Gerrard


Ground, Patrick
Neubert, Michael


Grylls, Michael
Nicholls, Patrick


Hamilton, Hon A. (Epsom)
Norris, Steven


Hamilton, Neil (Tatton)
Onslow, Cranley


Hanley, Jeremy
Oppenheim, Philip


Hannam, John
Ottaway, Richard


Hargreaves, Kenneth
Owen, Rt Hon Dr David


Harris, David
Page, Richard (Herts SW)


Harvey, Robert
Peacock, Mrs Elizabeth


Haselhurst, Alan
Penhaligon, David


Hawkins, Sir Paul (SW N'folk)
Pollock, Alexander






Porter, Barry
Stewart, Andrew (Sherwood)


Powell, William (Corby)
Stewart, Rt Hon D. (W Isles)


Powley, John
Temple-Morris, Peter


Prentice, Rt Hon Reg
Thompson, Donald (Calder V)


Price, Sir David
Thornton, Malcolm


Proctor, K. Harvey
Thumham, Peter


Raffan, Keith
Townend, John (Bridlington)


Renton, Tim
Tracey, Richard


Rhodes James, Robert
Viggers, Peter


Ridsdale, Sir Julian
Wainwright, R.


Rippon, Rt Hon Geoffrey
Wakeham, Rt Hon John


Sackville, Hon Thomas
Walden, George


Sainsbury, Hon Timothy
Walker, Bill (T'side N)


Shaw, Sir Michael (Scarb')
Wall, Sir Patrick


Shelton, William (Streatham)
Wallace, James


Sims, Roger
Waller, Gary


Skeet, T. H. H.
Warren, Kenneth


Smith, Tim (Beaconsfield)
Watson, John


Speed, Keith
Watts, John


Spencer, D.
Wells, John (Maidstone)


Spicer, Jim (W Dorset)
Wheeler, John


Spicer, Michael (S Worcs)



Steel, Rt Hon David
Tellers for the Ayes:


Stern, Michael
Mr. David Hunt and Mr. John Major.


Stevens, Lewis (Nuneaton)



Stewart, Allan (Eastwood)





Noes


Archer, Rt Hon Peter
Crowther, Stan


Beckett, Mrs Margaret
Cunningham, Dr John


Bennett, A. (Dent'n &amp; Red'sh)
Davies, Rt Hon Denzil (L'lli)


Bermingham, Gerald
Davies, Ronald (Caerphilly)


Bray, Dr Jeremy
Davis, Terry (B'ham, H'ge H'l)


Brown, Gordon (D'f'mline E)
Deakins, Eric


Brown, Hugh D. (Provan)
Dewar, Donald


Callaghan, Rt Hon J.
Dixon, Donald


Callaghan, Jim (Heyw'd &amp; M)
Dormand, Jack


Canavan, Dennis
Douglas, Dick


Clark, Dr David (S Shields)
Dubs, Alfred


Clay, Robert
Dunwoody, Hon Mrs G.


Cocks, Rt Hon M. (Bristol S.)
Eadie, Alex


Coleman, Donald
Eastham, Ken


Concannon, Rt Hon J. D.
Evans, John (St. Helens N)


Cook, Frank (Stockton North)
Ewing, Harry


Cook, Robin F. (Livingston)
Fatchett, Derek


Corbett, Robin
Field, Frank (Birkenhead)


Craigen, J. M.
Fields, T. (L'pool Broad Gn)





Fisher, Mark
Miller, Dr M. S. (E Kilbride)


Flannery, Martin
Morris, Rt Hon A. (W'shawe)


Forrester, John
Nellist, David


Foster, Derek
O'Neill, Martin


Foulkes, George
Orme, Rt Hon Stanley


George, Bruce
Park, George


Gilbert, Rt Hon Dr John
Parry, Robert


Godman, Dr Norman
Patchett, Terry


Golding, John
Pavitt, Laurie


Gould, Bryan
Pike, Peter


Hamilton, James (M'well N)
Powell, Raymond (Ogmore)


Hamilton, W. W. (Central Fife)
Prescott, John


Harman, Ms Harriet
Randall, Stuart


Harrison, Rt Hon Walter
Redmond, M.


Haynes, Frank
Robertson, George


Heffer, Eric S.
Rooker, J. W.


Hogg, N. (C'nauld &amp; Kilsyth)
Ross, Ernest (Dundee W)


Home Robertson, John
Rowlands, Ted


Hughes, Robert (Aberdeen N)
Sheldon, Rt Hon R.


Hughes, Sean (Knowsley S)
Shore, Rt Hon Peter


John, Brynmor
Short, Mrs R.(W'hampt'n NE)


Jones, Barry (Alyn &amp; Deeside)
Skinner, Dennis


Kinnock, Rt Hon Neil
Smith, Rt Hon J. (M'kl'ds E)


Lewis, Ron (Carlisle)
Snape, Peter


Lewis, Terence (Worsley)
Strang, Gavin


Lloyd, Tony (Stretford)
Thomas, Dr R. (Carmarthen)


Loyden, Edward
Thompson, J. (Wansbeck)


McCartney, Hugh
Thorne, Stan (Preston)


McGuire, Michael
Tinn, James


McKay, Allen (Penistone)
Torney, Tom


McKelvey, William
Wardell, Gareth (Gower)


Mackenzie, Rt Hon Gregor
Wareing, Robert


McNamara, Kevin
Welsh, Michael


McTaggart, Robert
Wigley, Dafydd


Madden, Max
Williams, Rt Hon A.


Marek, Dr John
Winnick, David


Marshall, David (Shettleston)
Young, David (Bolton SE)


Mason, Rt Hon Roy



Maxton, John
Tellers for the Noes:


Maynard, Miss Joan
Mr. Harry Cowans and Mr. Ron Leighton.


Michie, William



Millan, Rt Hon Bruce

Question accordingly agreed to.

Bill read the Third time and passed.

Orders of the Day — Town and Country Planning

The Under-Secretary of State for the Environment (Mr. Neil Macfarlane): I beg to move,
That the draft Town and Country Planning (Fees for Applications and Deemed Applications) Regulations 1983, which were laid before this House on 25th July, be approved.

Mr. Speaker: With this it will be convenient to consider motion No. 3 on the Order Paper:
That the draft Town and Country Planning (Fees for Applications and Deemed Applications) (Scotland) Regulations 1983, which were laid before this House on 26th October, be approved.

Mr. Macfarlane: These two sets of regulations, which are laid under powers contained in section 87 of the Local Government, Planning and Land Act 1980, provide for a number of changes to the fees scheme, which was introduced in April 1981 and amended in June 1982. They update and supersede both the original regulations and the amending regulations of 1982. The changes that the new regulations introduce follow the review of the workings of the planning fees scheme that my hon. Friend the Member for Pudsey (Mr. Shaw) announced in the House during last year's debate on the 1982 regulations, and they reflect the conclusions drawn from that review and also from the correspondence that my Department has had with hon. Members and others outside the House.
Most of these changes are concerned with the detailed workings of the fees scheme — the way it affects particular sorts of applications and the variety of circumstances in which applications for planning permission are made. But we propose one change that will affect every application and every applicant equally, and that is a modest across-the-board increase of 7 per cent. in the levels of all fees, with the maximum fee for every kind of development going up by the same amount. I will return to this in a moment.
It may be for the convenience of the House if I give a brief outline of the way in which the fees scheme works, to put the changes into context.
Any applicant who seeks planning permission for a building operation or a change in the use of land must pay a fee to the local planning authority, usually the district council, when submitting his planning application. The fee must be as prescribed by the regulations and it cannot be waived or refunded, but there are concessions where normal fees would be unreasonable. Subject to that, applications are charged according to the kind of development proposed and its size where this is relevant. The scheme basically is designed so that, firstly, there is a fair balance between the categories of development; secondly, the fee should reflect in broad terms an authority's likely handling costs; thirdly, fees do not discourage sensible planning applications; fourthly, the scheme is easily understood and operated and free of areas for dispute.
Naturally there is some conflict in these requirements but they have determined whether and which changes should be made to the way the scheme operates. We started our review by inviting comment from over 140 organisations on how the scheme was working, and on the most frequently made suggestions for change. But we made it clear that the principle of charging for applications was not under review. There were over 180 responses to

that letter, and there was a clear divide. Local planning authorities, naturally, preferred simplicity and clarity and did not want major changes. Developers' responses argued, naturally, for more concessions and complexity in the interests of fairness, and we have tried to balance these conflicting demands. It was clear to us, however, that the overall shape, and the degree of detail, was broadly correct.
The scheme is working reasonably well, we found, and such changes as were needed could be easily accommodated. I was also pleased to note that now the scheme has been established it does not impose any great administrative burden upon either side, and that fears of the planning system slowing down or of damage to the relationship between authority and applicant were unfounded. If anything, officers tend to help applicants to get proposals right first time so that the fee is not spent upon an unsuccessful application. I believe the general principle is now understood and accepted.
I should like now to summarise briefly the main changes embodied in the new regulations. I hope that hon. Members will bear with me through some of the more technical and complex features of the planning system.
The regulations provide for an increase of 7 per cent. in the overall levels of fees, with the cut-off point for each fee category rising pro rata. We have for the second time kept the increase broadly in line with inflation, remembering of course that the last increase was over 12 months ago. This means that fees will continue to offset somewhat less than 40 per cent. of the total estimated expenditure on the development control system, which is currently running at something like £70 million to £75 million per annum in England and Wales. This is something that we are keeping under review in the light of the wider need to control public expenditure, but in these regulations we are not seeking to move towards any higher percentage cost recovery. Depending on the overall level of applications, and of course their composition in fees terms, the yield from the increased level of fees in a full year is estimated at between £28 and £30 million.
The basic units of fee will now be £47 instead of £44, and £24 instead of £22. The erection of dwellinghouses, for example, is to be charged at £47 per dwellinghouse in the case of a full application, or application for approval of details, and £37 per 0·1 hectare of site area in the case of an outline application. The householder who wishes to extend his house or put up a large amateur radio mast in his back garden will now pay £24 instead of £22 — assuming he needs planning permission for what he proposes. Erecting non-residential buildings will incur a fee of £47 per 75 sq m of floor space instead of £44, and so on throughout the fees scale. The details are contained in the regulations. The maximum fee or cut-off point in each fee category with a sliding scale is increased so that it remains at the same level relative to the basic fee unit concerned.
There are more specific changes aimed at refining the scheme. Last year my hon. Friend announced an important concession in the fees charged for agricultural buildings. He undertook to consider what more might need to be done to meet the special case presented by glasshouse growers. We had received a number of representations to the effect that even with last year's new discount in the calculation of floor space for agricultural buildings, the application fees to build or replace the typical one acre or more glasshouse was excessive. It was said that glasshouses


were low-cost standardised structures, often on traditional sites, and that local planning authorities did not need to give those applications very detailed consideration, despite the enormous size of some of the buildings in terms of floor space. We have been impressed by those arguments. Fees should not be too high a proportion of an applicant's total costs, and it is true that for secondhand glasshouses in particular a fee of up to £2,200 would represent a very high proportion indeed.
The fee should also reflect a local authority's work on a typical application. We therefore propose a special additional fee category for glasshouses—including the polythene tunnels that are often used. The fee will be a flat rate £280, based on the average size of a glasshouse application; and glasshouses below 465 sq m in floor space which happen to need planning permission will continue to be exempt from fee along with other agricultural buildings. I believe that that substantial concession is justified in terms of fees scheme principles, and will be welcomed by the horticulture industry.
The next important change is of potential benefit to all applicants. At present, a successful applicant who obtains planning permission but needs to alter his scheme to an extent that requires a fresh application, has to pay a fresh fee—usually equal to the fee he has already paid. I am concerned that the fees scheme should not discourage flexibility in the planning system, and so the new regulations contain a new "free go" exemption. An application by the same applicant submitted within 12 months of obtaining planning permission for development of the same character or description on the same land will now be exempt, in the same way as it would had the permission been refused or the original application withdrawn. That change will make it a much more reasonable proposition to amend a proposed development after planning permission has been obtained.
There is a further concession aimed at maintaining flexibility. At present an applicant who simultaneously puts forward alternative proposals for one site must pay a total fee calculated separately for each application. That discourages some from exploring several options for a site and does not reflect the fact that the options may often be so similar that double fees are unjustified in terms of local planning authorities' handling costs for the applications concerned. We propose that the applicant will pay only the highest fees due for the various alternatives, plus an amount equal to half the fees that would otherwise be payable for the remaining alternatives.
We have also made some further concessions for certain forms of development as well as particular circumstances in which applications are made. The existing exemptions for works intended to adapt a disabled person's dwellinghouse to improve his safety, convenience or comfort have been extended to cover cases where he is not yet in residence; and also to cover any works to improve his access to buildings in public use such as shops and cinemas. We hope that that latter concession will especially encourage the owners of such buildings to submit applications for access ramps and the like to help towards improving the accessibility of their property to disabled people.
Development undertaken by parish and town councils is another area where a concession is appropriate. They have to make planning applications like everyone else in order to undertake their own development — because unlike districts and counties, they are not planning

authorities and cannot give themselves planning permission. Their applications may cost as much to handle as would anyone else's, but they are, however, part of our local government system. Furthermore, what they build by way of village halls, bus shelters and so on is likely to he paid for or helped by the public purse—quite often from district council funds. We propose, therefore, that applications by parish and town councils will incur half the normal rates of fees, to reflect their special position with regard to the other tiers of local government.
Apart from concessions to certain kinds of development, we have been concerned to remove some uncertainties and unfairness that have come to our attention. One problem area concerns development that happens to straddle the boundary between two local planning authorities. In those cases separate planning applications have to be made to each authority and for a large development the maximum fee can be reached for both halves of the site, whereas had the same site been wholly within one authority's jurisdiction, the fee payable would have been lower by virtue of the ceiling that applies to every application. Applications made in those circumstances are certainly more expensive to handle than would be one application to one authority, for obvious reasons, but we concluded that the costs could and should be reflected more accurately.
The draft regulations provide that only one fee will be paid in those cases instead of two, but it will be calculated as if all the development site were contained in one application. It will he subject to a single maximum cut-off point, but that maximum will stand at one and a half times the normal one instead of effectively double. In cases where the district councils are merely receiving applications and collecting fees on behalf of a single county planning authority—most often in minerals cases —the cut-off point will be the normal one to reflect the fact that in those cases there is only one decision taken on the applications and not two.
Advertisement applications enjoy two amendments in the new provisions. The first of those deals with advertisments on parking meters, litter bins and bus shelters. At present a fee of £44 is payable per site, but it has not been very clear whether each item of street furniture is a separate site for fees purposes requiring a separate fee. That uncertainty needs to be cleared. Local authorities welcome the revenue from letting out space on their street furniture for advertisements and it is important not to discourage applicants with uncertain or excessive fees. We now propose, therefore, that for fees purposes the site shall be the area covered by the application, so that only one fee of £47 is payable in every case.
The second change is the introduction of a "free go" or exemption for revised applications following the refusal of an earlier one or its withdrawal before any decision was taken on it. That mirrors the existing "free go" arrangements for revisions of ordinary planning applications, and is intended to allow applicants to revise their proposals and resubmit them in a form more likely to obtain planning permission without paying a further fee. Those two changes should be very welcome to authorities and applicants alike.
Some changes will not, perhaps, be quite as welcome to some applicants as others, but they are essential improvements to the operation of the scheme. The first of these concerns the use of land for the outdoor storage of extracted minerals and spoil. At present, where that form


of development needs a specific planning application, it attracts a flat rate fee of £44 as a change of use of land. But stockpiling excavated material and working the piles subsequently can involve a good deal of noise, dust and traffic, and the application can involve a local planning authority in a good deal of work. The present fee of £47 in no way reflects the authority's handling costs, and we therefore propose that that development is to be charged on the same sliding scale of fees as waste disposal, giving a fee of £24 per tenth of a hectare of site area.
The second of these changes concerns applications to continue a use of land or retain a building without complying with a condition imposed on the original planning permission. At present, most of these applications incur a flat rate of £44, but there is an exemption for those applications where the condition in question placed a limit on the life of the building or the use, making the permission in effect a temporary one. This distinction causes a certain amount of unnecessary confusion, and we propose that all "conditions" applications—that is applications to retain a development without complying with a condition—are subject to the flat rate fee. There will be no further blanket exemption for temporary permission, but if the original permission is less than 12 months old, any applicant seeking to remove or alter a condition on that permission should be able instead to claim exemption under the new "free go" at regulation 6, which I discussed in the earlier part of this speech.
The third and final change concerns the submission of details which the local planning authority reserves for its later approval when it gives an outline planning permission. Approval of these "reserved matters"—design, external appearance, siting, access and landscaping—can be sought all at once or piecemeal, as the applicant prefers. Each application for approval is either charged a fee based on the number of houses or floor space involved, or it may qualify for a special low flat-rate fee of £44 — when the applicant adopts a "piecemeal" approach—which avoids the applicant paying fees at the full rate several times over. However, the qualification for the flat rate is a complicated one which causes confusion among authorities and applicants alike, and it can sometimes land applicants with excessive fees. We have simplified these arrangements so that only when an applicant has paid fees for his reserved matters equal to the fees for a full planning application does the flat rate come into play for any further approvals that he may need. This means that first approvals in a series of piecemeal approvals may be more expensive to obtain than before, but the overall liability to fees before a development can commence will not be increased, and in some cases it will be lower.
Consultations on the operation of the fees system in Scotland gave rise to conclusions which were very similar to those of the review to which I have already referred. Thus the Scottish regulations are in most respects the same as for England and Wales, although they incorporate some very minor differences to reflect different circumstances north of the border. The main differences, which have been carried over since the 1982 regulations for Scotland, are that there is no special category for agricultural buildings or glasshouses, and that there is a single flat rate fee for advertisement applications.
There were, of course, a good many other suggestions for changing the fees scheme which came to us in response to the review, and in my Department's correspondence with hon. Members. Some of these had an obvious appeal, but on closer examination they turned out not to fit in with one or more of our guiding principles. The idea of a concession for charities' and voluntary bodies' applications was one such possibility which we looked at with particular care, as was a concession towards applications made by small firms.
Apart from the obvious fact that those applications cost as much to handle as those of anyone else, there are many problems that arise immediately from that. I could not contemplate any provision that would provoke argument and disputes between the parties, as to the scope of a concession or the "deserving" nature of the applicant concerned. We have therefore remained firmly with the principle that the nature of the application, not the applicant, shall determine the fee to be paid in each case.
We shall continue to monitor these regulations and their operation, the level of fees and the suggestions that are still arriving to me for further change. In identifying necessary changes for the new regulations, which come into force on 1 December, we have been fair and open-minded to every representation made to us. In particular, we have not been concerned to maximise fee income to planning authorities. Our concern has been instead to strike a fair balance between equity and simplicity.
I commend the regulations to the House.

Dr. David Clark: I shall not detain the House for too long for the simple reason that, as the Minister knows, the Opposition are completely opposed in principle to charging for applications. The purpose of the planning system is to provide a satisfactory environment and service to the building industry, and a charge for this function is not in order. Therefore, as we are opposed to the issue in principle, it would not help the House if I quibbled about this or that little point.
I fully appreciate that, like everyone else, the Minister did not want to go into too much detail, but we feel it only right and proper to ask a number of questions. I noticed that the hon. Gentleman was a little cautious, perhaps as a result of his experience and that of his colleagues in 1981 and 1982 when the Government gave figures of how much local authorities could expect to receive each year as a result of the applications. As the Minister knows, the Government got it wrong then, and I should be interested to know whether the Minister now has the estimates right, because these are made for the local authorities, for when they come to make their budgets. I should appreciate it if he could say something about that when he replies.
I am not sure how long the Minister expects these regulations to last. I know that they are to come in on 1 December. The previous regulations came in on 3 March 1981 and 11 May 1982. Are the Government thinking in terms of the regulations running for a year? If so, why do they propose an increase of 7 per cent? The Prime Minister and her colleagues tell us how successful they are in dealing with inflation, that it is now 5·1 percent. and that they confidently expect it to remain at that level or even to fall. Therefore, why do the regulations refer to 7 per cent., which is higher than the 5·1 per cent. rate of inflation? Could it be that the Department of the Environment is a little more realistic than the Treasury in these matters?
The Minister tried to deal with street advertising. It is difficult to explain such a complicated issue to the House, and there are two points that I do not understand and I should like him to elaborate. I know that this matter has caused many difficulties for local authorities, and I know that local authorities welcome the Minister's efforts to try to clarify the position. I am sure that he has done so for them, but he has not for me. What is the position?
I think that the Minister was saying that the regulations in essence provide that there will not be a separate charge for each individual advertisement, but that the charge for a planning application will relate to the whole site. I am not sure what "the whole site" refers to. Are the Government thinking in terms of a whole local authority area, or a street, or part of a street? I should appreciate an explanation from the Minister either now or later.
The Minister said that the system was working better than he thought it would. Has he had any complaints recently from local authorities? As he knows, there were complaints earlier about the scheme under the first two regulations. The authorities said that a great deal of staff time was being taken up in explaining the complexities of the planning system and giving advice on pre-planning stages. That was distorting the demands on staff in planning departments. The Minister knows that that was the earlier complaint, but does the problem still exist? I get the feeling that it does and I should welcome some comments on that point.
Another issue is that of spoil heaps. This is one of the negative changes in the regulations, as the charge on them is increased. I can understand the case for that with quarrying, but does it apply to stockpiling by the National Coal Board at its pits, and to the storage depots of the electricity board power stations? It would be nice to know whether the change applies to the NCB, and, if so, whether the Minister had discussions with it and the CEGB.
The regulations are being introduced a little later than we might have expected. because the Minister's colleague said on 11 May 1982 that the time was ripe for what he called "a … fundamental review" into how the system was working. That review took place late in 1982. There is a feeling that the fundamental review was not as fundamental as it should have been. The bodies who are concerned about the matter, and who are not necessarily antagonistic to the Government in this respect, feel that the review was not fundamental enough, and that there was merely a tinkering with the system. I hope that the Minister will answer that point. If he feels that the review was sufficiently fundamental, could he could give us information perhaps by depositing it in the Library, about the nature of the review? People need to be reassured that it was as thorough as the Minister implied.
The Opposition welcome most of the minor changes that have been introduced. We oppose the system, as I have said, but if it is to operate we want it to operate as effectively as possible and in the least punitive way. We welcome the proposals for parish and community councils to get special half rates. We welcome what I shall call the free goal for some amendments to planning permission which has gone ahead in the previous 12 months.
However, there is a great lacuna in the system—one great change that is necessary. I appreciate that the Minister is trying to strike a balance between simplicity and good planning. Of course that makes sense. If there is a change of use there is basically a standard charge, and as the Minister knows—we have been over the matter

time and again in the Local Government (Miscellaneous Provisions) Act — one has to apply for planning permission before a change of use, for example. between certain types of shops. If one wants to change a small shop into a betting shop one has to make a planning application and pay a standard charge of £47. Clearly, that does not involve a great deal of work for the planning authority or anyone. However, if one wants to turn a food store into a do-it-yourself shop, which might involve other complicated issues including storage, ventilation, lighting, fire regulations, and so on, it is easy to imagine that the local authority would have to do a lot of work in connection with that. So, while we welcome simplicity, we feel that there is still room for further changes. I hope that the Minister will consider this aspect, and that when he introduces new regulations, which I am sure he will be required to do in due course, he will be able to accommodate us on that.
I end where I began. We have studied the system's operation over three years, and we still think that it is ill conceived. We still believe that planning is for the benefit of the whole population, and that it is a service. Everything must be done to instil confidence in the planning system, among the planners and the general public. What disturbs me is that planners are always the bad guys. I am sure that all hon. Members get that message from our constituents—rightly or wrongly. That is a great mistake, and it is sad. We must create confidence between the planner and the citizen. We still believe that the introduction of a cash nexus into the system helps to destroy that confidence and makes the situation worse.

Mr. Peter Griffiths: My hon. Friend may be aware that before and during the passage of the Local Government, Planning and Land Act 1980 I had correspondence with his Department about fees for planning applications. At that time I was seeking some way to prevent the problem, which has been prevalent in my constituency, the city of Portsmouth, of repeated and vexatious planning applications. When an application is repeated several times, particularly in an urban area, it can cause a great deal of disquiet and worry to the people who are affected. They feel that they are forced to defend their homes and environment against the proposed change. Particularly if the application is repeated with little variation, they feel that they are being pushed into a position where it is hoped that in the end they will simply give up and cease to oppose the application.
So when fees were first introduced I spoke in favour of them, because I hoped that the introduction of a cost element would discourage those who tended to put in frivolous applications which they perhaps had little intention of carrying through and which were sometimes intended simply to be vexatious to people who previously opposed them. To prevent that, I am very much in favour of the principle of fees for applications. I should like a sliding scale to apply, whereby the reintroduction of a virtually similar planning application, within a given period, would require a higher fee to be paid, bearing in mind the concern that it might cause to those who feel that they have a legitimate right to object.
Having taken that view, basically as a result of my own understanding of the problems and of the pressures brought to bear on me on many occasions by my constituents when faced with applications to which they objected, I was


recently given a quite contrary view. I hope that my hon. Friend the Minister will tell me at the end of the debate whether this view has been expressed to his Department, and if so on how many occasions. The Portsmouth city council—a responsible body in this matter—is disturbed by the way the charging of fees has operated and may operate, following the increase. I appreciate that the increase in fees is only about 7 per cent. Nevertheless, when these regulations come into force, assuming that they do, the matter will be advertised. It will be a matter of discussion. The Portsmouth city council fears that people will be discouraged from making applications before making changes and alterations to their properties, particularly in the case of development under categories 6, 7 and 9, which do not necessarily involve immediately obvious changes to the property. The changes may be internal or at the rear of properties. They may involve changing a single dwellinghouse into a house in multi-occupation. The city council, and, I am sure, other local authorities would want to know about such changes. It would not want anything to happen that would encourage people to avoid bringing the matter to the attention of the local authority.
The city that I represent is one of the most densely populated in Britain. Its housing stock is very old. Therefore, changes of use, alterations and improvements are relevant to Portsmouth, just as they are to many of our older industrial towns. If landlords are carrying out work on a do-it-yourself basis or at the minimum price, the point that the Minister made about the percentage of the total cost that is represented by the cost of the planning application may well apply. Someone who carries out changes on a shoestring may be put off by the fact that he has to produce £47 in cash in order to make his planning application.
If no other council has seen that problem, I shall not press the issue further tonight. However, if other city, district or county councils have made similar representations to the Minister, I hope that he will agree to keep an eye on the matter. I also hope that he will ensure that for the sake of raising a relatively small sum in revenue we do not discourage the disclosure of changes, particularly to multi-occupation, which should be subject to close scrutiny by councils.
I do not intend to press the matter tonight. Indeed, I do not think that my city council would want me to do so. It would only wish me to make it clear to the Minister that this is a matter of concern, and that it intends to return to it if the fees are raised considerably in future.

Mr. Simon Hughes: As has been said, this matter came before us in its substantive form in 1980. At that time my hon. Friend the Member for Isle of Wight (Mr. Ross) moved an amendment suggesting that the provision that allowed charging for fees as a matter of principle should not be included in the legislation. That amendment was supported by Liberal Members and in principle but sadly not in the Lobby, by the official Opposition. I pay tribute, however, to one hon. Member who took part in that debate and in the two following debates; the former hon. Member for Edmonton, Mr. Ted Graham as we knew him. I only knew him briefly, but he

was a loyal and persistently critical member of the Opposition. All Opposition Member will miss him in this House.
In taking issue with the Minister I can do no better than to restate the principle enunciated clearly today by the hon. Member for South Shields (Dr. Clark) and first set out in Hansard in 1980, by my hon. Friend the Member for Isle of Wight, which registers the objection in principle raised to those fees. My hon. Friend said:
Their introduction is mistaken and misdirected, and I oppose the whole concept, as I did in Committee. It is an infringement of civil liberty. It is a charge for a restriction that has been introduced for the benefit of the people as a whole. It will establish a bureaucracy that will have to be set up to collect the fees. There will be delays, because people will not be able to pay the charges on the spot. They will not appreciate what has happened to them."—[Official Report, 8 July 1980; vol, 988, c. 425.]
Obviously the Act is on the statute book, and today we are doing only what we are required to do annually in looking at the regulations. However, I reiterate our strong objections to the principle behind them. Normally it is the individual rather than the corporate applicant who is most discriminated against although I shall return to that point later. It was pointed out—my hon. Friends were proved right—that a fee is often a great disincentive to apply for planning permission even if the sum involved appears to be relatively small. A few years ago I first contemplated moving from the south to the north of the Old Kent road. In doing so I contemplated moving from a rented property to one that I might be able to purchase. I inquired whether the best bit of the property had planning permission and was told that it did not. Part of the reason for that was that planning permission had to be paid for; the other part was that the extended property would be rerated. The problem for me was that the alteration constituted more than the relevant part of the floor area. If I had been caught without planning permission for that I would no doubt have been told to pull it down.
In 1980 my hon. Friend the Member for Truro (Mr. Penhaligon) mentioned that on investigation by planning officers, a substantial number of caravans in his constituency were found not to have been the subject of planning permission. A fee often acts as a disincentive to individuals and small businesses that are thinking of applying for planning permission. Of course there are frivolous applications. I accept the point made by the hon. Member for Portsmouth, North (Mr. Griffiths) that there are also applicants who persistently push at a door that may one day give way under the pressure. That is no reason, however, for imposing the sort of fee set by these regulations, although, if one is forced to concede the principle, it may be a reason for having a nominal fee that makes people realise that they have to put a small sum up front.
Tonight the Minister gave us the figures for the income that will be produced. How does that compare with the reduction in income resulting from the reduction in the centrally funded rate support grant? It is all very well for the Government to say that this measure will give local authorities more revenue, but the Government spend all their time taking revenue from them. It is unfair to penalise directly a possibly impecunious individual when he is also suffering hardly less directly from a large reduction in the traditional level of funding from central Government.
As an example of the disproportionate cost, I shall cite a case that involves Southampton. A Liberal councillor


wrote to me under the heading "Planning fees for formation of private vehicular access to a classified road". The letter was sent only about two weeks ago and states:
I am writing to you.…in connection with an item of casework raised by one of my constituents, which has a more general implication.
My constituent lives in a row of terraced houses on a 'C' road with a traffic flow of less than 5,000 vehicles per day. Most of the other houses in his row have lowered kerbs and vehicle hard standing. He, too, wishes to have a kerb lowered but the planning fee alone for this will be £22·00"—
that is going up to £24—
which is ridiculously high compared to the nature of the work and the scale of the planning decision required.
Is the Minister prepared to say that either now, or the next time these regulations come before the House, there will be a further exemption for all those planning applications that relate to work that can be shown at the time of application to cost less than the cost of the application? It is ludicrous that someone who wants to lower the kerb in front of his house at the cost of a few pounds — which will take a minute at the most of administrative time — should pay a fee that is so disproportionate to the cost and time involved. I could give other examples involving small businesses that have to pay higher fees.
I hope that the Minister will also take up the suggestion made by the hon. Member for South Shields about publishing the Department's review. We should like to see the comments made in the past year by officers, planning authorities and other interested parties. The House should have an opportunity to look carefully at that. I should also like the Minister to consider seriously the possibility of exempting all low-cost applications from a charge.
Given that we have, for today, had to concede the principle—the Minister was honest enough to say that the principle was not under review—we welcome the concessions. But how many representations has the Department received in the past year from people who still object to the principle? To my knowledge, most of the professional bodies which dealt with this matter in 1980 and subsequently still object to the principle. Next, how does the Minister justify the 7 per cent. increase this year? Why 7 per cent? I hope that we are not given the bland answer that the Government want local authorities to have a greater income to offset their expenditure.
Although we welcome other concessions too, why cannot we have an exemption, as we have had until now, for the continuation of temporary planning permission when the position has not been determined by an authority or by an applicant, and, at the suggestion of the committee perhaps, has been referred back because of planning blight or because the greater planning considerations for the area have not been decided by the authority.
There are other good reasons for the Minister to look again at the regulations. What is the proportion of applications by domestic individuals in relation to the applications by commercial enterprises, small and large? What is the average cost of applications made by domestic individuals and the average cost of applications made by commercial enterprises?
What is the average cost for substantial planning developments such as the 2·25 million sq ft office development in my constituency, to which I object, and about which the Minister knows because we had a debate about it some time ago, compared with the cost for the average individual or the average small business? Those

are the considerations that, if any must, should govern the cost of the fees. In justifying the principle, to which we object, I hope the Minister will give a breakdown of what people are paying for the privilege of development — that is what the Government believe it to be—so that we can at least know that there is fairness in the system, however misconceived it is in principle.
We will continue to object to the principle because planning legislation since the war has existed to protect the community. Individuals who develop parts of a community, which they have a right to develop, often do so in the community interest as well as their own. In the meantime and until we can amend the principle I hope the Government will make some further concessions and consider the areas of specific concern that I have mentioned tonight.

Mr. Martin J. O'Neill: Like the hon. Member for Southwark and Bermondsey (Mr. Hughes), I regret the absence of Ted Graham, the former Member for Edmonton, who was such an active participant in similar debates in the past. We know that he will be serving the Labour Party in another place but we regret his elevation because we would have preferred him to be here with us.
This debate is very much a re-run of previous debates. The alterations in the regulations are minimal. I recognise that there has been a lengthy consultation process. It has been like the gestation process of an elephant but in this case it has given birth to a mouse. I did not hear very much in the way of encouragement from the Minister.
We reiterate our principled opposition to the arrangement whereby cuts in Government funding are set against the need for local authorities to increase charges or, in this case, first to introduce them and subsequently to increase them. The Opposition will not go down the road along which the hon Member for Southwark and Bermondsey was beginning to stray with the injustices in the system requiring some people to pay more. We believe in the principle that no one should pay for planning agreements. We recognise that, as presently operated, there will be inequities and that in some cases the inequities will not be resolved by tinkering with the regulations.
The Minister should tell us more about the reduction in the number of planning applications. We realise that this is perhaps due to charges. We also accept his point that there is probably a desire by applicants to get it right the first time. The Minister had surveys carried out and has received responses from local authorities. We would be interested to know to what extent the work has increased. The difficulties which have been created by people wishing to get it right the first time, which may in some respects be a satisfactory by-product of the charges system, may lead to planning officials assuming a much greater responsibility in assisting with the drawing up of the plans than some of the professional advisers whom individuals have hired to do the job for them. The local government officials will be doing the work of the professionals.
It has been suggested that the reason why special treatment for charities and voluntary bodies is not being introduced is that such a move would result in a further increase in the work of the local authority. It is suggested that it would be difficult for local authorities to introduce a means test or screening process to establish whether there


were deserving cases. This is the first time I have heard of a means test being an excuse for having no benefit at all. We have often heard that a benefit should be provided by way of a means test, but I have never heard of a benefit being denied because of the complexity of the means test or the difficulties that can arise.
One specific question is exercising many local authorities in Scotland, and I have reason to believe that this applies to England as well. In Glasgow, as a result of the decision to end the home improvement grants scheme, a considerable number of people will be left with contracts with builders and others that will have to be paid regardless of the funding that local government receives. If an individual has applied for planning permission, has paid his fees, has had planning permission granted and then cannot proceed with the improvements because of the withdrawal of the grant, will the local authority be able to reimburse that money and will the local authority be reimbursed by central Government?
I realise that this is a complicated matter, but when the Government introduce pettifogging regulations of this nature and charges of this kind it is inevitable that our time will be taken up by the nitpicking in which many of us have had to indulge this evening — and I say that without any attempt to denigrate the efforts of my hon. Friends. I am simply pointing out that this is a complicated area of legislation which has come in for more obfuscation than anyone would have expected. It simply affords an opportunity for the Government to claim that they are reducing public expenditure.
In our view, the desirability of improving the quality of the environment in relation to our homes is an obligation which should not be subject to financial penalty. All should have the right to go to the local authority and get the benefit of the expertise which resides at that level, remembering that local authorities have a responsibility to maintain the environment of the community.
For those reasons, we shall oppose the regulations.

Mr. Macfarlane: I am grateful for the comments that have been made by hon. Members in all parts of the House. I appreciate that many hon. Members are not yet reconciled to the concept of, and guiding principles which we implemented in, the 1980 legislation. A number of points have been raised and they have provided a wide-ranging examination of the complex and highly technical matters of planning law and procedures.
Many of the points that hon. Members have raised were given careful consideration in our review. I have explained why the new fees scheme takes the form we propose and why many of the interesting ideas and suggestions have not stood up to the close scrutiny that we gave them. However, we are greatly concerned to identify and make improvements in the scheme and to test them against the scheme's underlying principles. I gave the assurance in my opening address that we would keep the matter under review and that we constantly have a dialogue with the local authorities and other interested parties to make certain that we are in touch with and understand exactly what the difficulties are.
I will respond to some of the points that have been made in the debate, but I undertake to write to all hon. Members on the more specific points, and I am sure that the hon.
Member for Clackmannan (Mr. O'Neill) will enter into a dialogue with the Under-Secretary of State for Scotland, my hon. Friend the Member for Edinburgh, South (Mr. Ancram) on a number of the matters he raised, but I shall deal with some of them.
The hon. Member for South Shields (Dr. Clark) posed a number of questions and I was grateful for his recognition that we were going for simplicity and equity. They are our guiding principles in all of this, and I should be alarmed as the Minister responsible if I thought that there was any deviation from those two guiding principles. If any hon. Member has evidence of concern—my hon. Friend the Member for Portsmouth, North (Mr. Griffiths) suggested that there were matters of concern to the people of his constituency — I have no doubt that I shall be told, at any rate through my officials, in more detail so that I may take up those matters, but I shall try to touch on some of them, albeit briefly.
I was asked how much money we had received. For rate support grant purposes, the estimated income was about £27 million in the current year. First indications are that between £28 million and £30 million would have accrued to local authorities.
The hon. Member for South Shields asked when the next legislation would come forward. That relates to the time factor. My hon. friend the Member for Pudsey (Mr. Shaw), now the Under-Secretary of State for Energy, took the instrument through the House in June 1982. Hon. Members will remember that debate and will be aware that, ideally, that instrument should have been renewed in June of this year. But I do not need to dwell on the reason for the protracted summer, for the recess and other events. We have introduced the regulations as quickly as possible, and it is possible that the next one will come in the summer of next year.

Mr. O'Neill: Is the hon. Gentleman suggesting that in some way local authorities might have made a slight profit out of the RSG settlement in relation to what they were expected to find for the operation of the scheme? Or is he simply saying that the amount of money is roughly equivalent to the short fall on which we are now trying to catch up as the result of inflation? We are adjusting the charges retrospectively to take account of price changes over a 12-month period, so it would be wrong to give the impression that by some means for the last 15 months local authorities were benefiting from the scheme.

Mr. Macfarlane: I cannot say that the word "profit" automatically comes to mind, but it is clear that for RSG purposes, the figure estimated was £27 million and the indication so far is that anything between £28 million and £30 million has accrued. The reason for the 7 per cent. increase—another point touched on by the Opposition—is that the last increase was on 1 June 1982, so that 7 per cent. reflects 17 months' increase in the costs of development control. It is also not unreasonable to expect applicants to contribute more to those costs so as to offset public expenditure on development control, and I remind the House, as I said earlier, that the costs were between £70 million and £75 million to local authorities.
The hon. Member for South Shields made an important point about street advertising. He wanted to know to what "the whole site" referred. This is a complex area. The site depends on the application. If the application is for one


street, that street is the site. If it is an application for a whole local authority area, that whole local authority area is the site.
The hon. Member raised another important point about mineral stockpiling and the consultations and dialogue that we shall have with some of the public undertakings. Clearly, the question he posed depends largely on whether the National Coal Board needs to submit a planning application. If it does, it must, like everybody else, pay a fee.
A number of the points that I made in my opening remarks covered a number of the questions raised by hon. Members in the debate, and I think that when they read Hansard more closely and look at the regulations, they will see those matters dealt with. However, those I did not touch on I will take up in close detail when I write to the hon. Members concerned.
The question of work load was referred to by the hon. Member for Southwark and Bermondsey (Mr. Hughes), by my hon. Friend the Member for Portsmouth, North and by the hon. Member for South Shields. The indication is that there are no great problems in that connection. The scheme is working well, although I made it clear that it was not universally popular throughout the country. Obviously it is not; it arouses quite a lot of indignation in some quarters. However, local authorities are now used to operating it and I pay tribute to the many planning officers and their staffs who have done much to try to make the system work effectively and to facilitate those people who have the sort of difficulties to which reference has been made.
As for the consultation paper, the fundamental nature of our review, we invited comments on all aspects of the scheme and, as I said, comments were made by well over 180 organisations, not including the individual correspondence that I and other ministerial colleagues have had in the past 12 months or so. We asked them to comment on all aspects of the scheme, though of course not on the principle of it. We are anxious to make certain that the scheme works efficiently and effectively.

Dr. David Clark: I appreciate that the Minister may not feel able to publish the details of the results of his inquiry. However, will he publish the list of people who submitted evidence? That might be helpful in that we could see the breadth of approach, even if he feels unable to publish the answers that were received.

Mr. Macfarlane: A number of the points that were made would obviously touch on confidentiality, but I shall write to the hon. Gentleman on the subject.

Mr. Simon Hughes: In taking the principle as read but not accepting it, I think that the House will be glad to see something more than the lists of those who submitted evidence—for example, a report as presented by the Minister or one of his colleagues. I understand that the cost to local authorities is £45 million, income being between £28 million and £30 million this year and the cost of the scheme being between £70 million and £75 million. This means that the local authorities' coffers are having to bear the shortfall of £45 million. It is important that the House should know whether the authorities feel that the scheme, for as long as it is with them, is working properly.

Mr. Macfarlane: I cannot give any categoric assurances or guarantees that I shall publish a review or

place one in the House. I shall take note of the hon. Gentleman's arguments. As I have said repeatedly, we are anxious to keep the scheme always under review.
My hon. Friend the Member for Portsmouth, North referred to repetition and vexatious planning applications. It is not the function of the fees scheme to encourage and create such results. I hope that my hon. Friend will inform me of any examples that he has. We shall want to do all that we can to eliminate, or to try to remove, the miseries and problems that my hon. Friend suggests the scheme is causing. If those consequences are widespread, I hope that he will let me know.
I repeat my promise to those hon. Members who have contributed to the debate that I shall write to them to respond in detail to the various issues that they have raised. I think that we should make progress now and accordingly I commend the regulations to the House.

Question put:—

The House divided: Ayes 178, Noes 110.

Division No. 59]
[8.1 pm


AYES


Aitken, Jonathan
Forsyth, Michael (Stirling)


Ancram, Michael
Forth, Eric


Arnold, Tom
Fox, Marcus


Ashby, David
Franks, Cecil


Aspinwall, Jack
Fraser, Peter (Angus East)


Atkins, Rt Hon Sir H.
Freeman, Roger


Atkins, Robert (South Ribble)
Gale, Roger


Baker, Nicholas (N Dorset)
Galley, Roy


Batiste, Spencer
Gardiner, George (Reigate)


Beaumont-Dark, Anthony
Goodhart, Sir Philip


Bellingham, Henry
Gower, Sir Raymond


Benyon, William
Greenway, Harry


Berry, Sir Anthony
Griffiths, Peter (Portsm'th N)


Bevan, David Gilroy
Ground, Patrick


Biffen, Rt Hon John
Grylls, Michael


Biggs-Davison, Sir John
Hamilton, Hon A. (Epsom)


Blaker, Rt Hon Sir Peter
Hamilton, Neil (Tatton)


Boscawen, Hon Robert
Hampson, Dr Keith


Bottomley, Peter
Hanley, Jeremy


Bowden, A. (Brighton K'to'n)
Hannam,John


Brandon-Bravo, Martin
Hargreaves, Kenneth


Bright, Graham
Harris, David


Brinton, Tim
Harvey, Robert


Brown, M. (Brigg &amp; Cl'thpes)
Hawkins, Sir Paul (SW N'folk)


Browne, John
Hawksley, Warren


Bruinvels, Peter
Hayes, J.


Buck, Sir Antony
Hayhoe, Barney


Budgen, Nick
Hayward, Robert


Bulmer, Esmond
Heathcoat-Amory, David


Burt, Alistair
Henderson, Barry


Butterfill, John
Hickmet, Richard


Carlisle, John (N Luton)
Hill, James


Channon, Rt Hon Paul
Hind, Kenneth


Chapman, Sydney
Hirst, Michael


Chope, Christopher
Holland, Sir Philip (Gedling)


Churchill, W. S.
Holt, Richard


Clark, Hon A. (Plym'th S'n)
Hooson, Tom



Clegg, Sir Walter
Howarth, Gerald (Cannock)


Conway, Derek
Howell, Rt Hon D. (G'ldford)


Coombs, Simon
Howell, Ralph (N Norfolk)


Cope, John
Hunter, Andrew


Couchman, James
Jessel, Toby


Dickens, Geoffrey
Johnson-Smith, Sir Geoffrey


Dicks, T.
Jones, Gwilym (Cardiff N)


Dorrell, Stephen
Jones, Robert (W Herts)


Douglas-Hamilton, Lord J.
Key, Robert


Dover, Denshore
King, Roger (B'ham N'field)


Dunn, Robert
Knight, Gregory (Derby N)


Dykes, Hugh
Knight, Mrs Jill (Edgbaston)


Evennett, David
Knowles, Michael


Eyre, Reginald
Lang, Ian


Fairbairn, Nicholas
Lawler, Geoffrey


Fallon, Michael
Lawrence, Ivan


Favell, Anthony
Lee, John (Pendle)






Leigh, Edward (Gainsbor'gh)
Peacock, Mrs Elizabeth


Lester, Jim
Pollock, Alexander


Lewis, Sir Kenneth (Stamf'd)
Porter, Barry


Lord, Michael
Powell, William (Corby)


McCurley, Mrs Anna
Powley, John


Macfarlane, Neil
Proctor, K. Harvey


MacKay, Andrew (Berkshire)
Raffan, Keith


MacKay, John (Argyll &amp; Bute)
Rhodes James, Robert


Maclean, David John.
Ridsdale, Sir Julian


Major, John
Sainsbury, Hon Timothy


Malins, Humfrey
Shaw, Sir Michael (Scarb')


Malone, Gerald
Sims, Roger


Maples, John
Soames, Hon Nicholas


Marlow, Antony
Spencer, D.


Marshall, Michael (Arundel)
Spicer, Jim (W Dorset)


Mather, Carol
Spicer, Michael (S Worcs)


Maude, Francis
Stern, Michael


Mawhinney, Dr Brian
Stevens, Lewis (Nuneaton)


Maxwell-Hyslop, Robin
Stewart, Allan (Eastwood)


Mayhew, Sir Patrick
Stewart, Andrew (Sherwood)


Mellor, David
Thompson, Donald (Calder V)


Merchant, Piers
Thompson, Patrick (N'ich N)


Meyer, Sir Anthony
Thurnham, Peter


Miller, Hal (B'grove)
Townend, John (Bridlington)


Mills,Iain (Meriden)
Tracey, Richard


Moate, Roger
Viggers, Peter


Moore, John
Wakeham, Rt Hon John


Morris, M. (N'hampton, S)
Walden, George


Morrison, Hon C. (Devizes)
Walker, Bill (T'side N)


Morrison, Hon P. (Chester)
Wall, Sir Patrick


Moynihan, Hon C.
Warren, Kenneth


Neale, Gerrard
Watts, John


Neubert, Michael
Wheeler, John


Nicholls, Patrick



Onslow, Cranley
Tellers for the Ayes:


Oppenheim, Philip
Mr. Tristan Garel-Jones and Mr. Douglas Hogg.


Ottaway, Richard



Page, Richard (Herts SW)





NOES


Alton, David
Clay, Robert


Banks, Tony (Newham NW)
Cocks, Rt Hon M. (Bristol S.)


Beckett, Mrs Margaret
Concannon, Rt Hon J. D.


Beith, A. J.
Cook, Frank (Stockton North)


Bennett, A. (Dent'n &amp; Red'sh)
Cook, Robin F. (Livingston)


Bermingham, Gerald
Corbett, Robin


Bray, Dr Jeremy
Cowans, Harry


Brown, Gordon (D'f'mline E)
Craigen, J. M.


Brown, Hugh D. (Provan)
Cunningham, Dr John


Bruce, Malcolm
Davies, Ronald (Caerphilly)


Callaghan, Jim (Heyw'd &amp; M)
Davis, Terry (B'ham, H'ge H'l)


Canavan, Dennis
Deakins, Eric


Carlile, Alexander (Montg'y)
Dewar, Donald


Clark, Dr David (S Shields)
Dixon, Donald





Dormand, Jack
Marek, Dr John


Dubs, Alfred
Marshall, David (Shettleston)


Eadie, Alex
Mason, Rt Hon Roy


Eastham, Ken
Maxton, John


Ewing, Harry
Maynard, Miss Joan


Fatchett, Derek
Michie, William


Field, Frank (Birkenhead)
Mikardo, Ian


Fields, T. (L'pool Broad Gn)
Millan, Rt Hon Bruce


Fisher, Mark
Miller, Dr M. S. (E Kilbride)


Forrester, John
Nellist, David


Foster, Derek
O'Brien, William


Foulkes, George
O'Neill, Martin


Freeson, Rt Hon Reginald
Orme, Rt Hon Stanley


George, Bruce
Parry, Robert


Gilbert, Rt Hon Dr John
Patchett, Terry


Godman, Dr Norman
Pavitt, Laurie


Golding, John
Pike, Peter


Gould, Bryan
Powell, Raymond (Ogmore)


Hamilton, James (M'well N)
Randall, Stuart


Harman, Ms Harriet
Redmond, M.


Harrison, Rt Hon Walter
Roberts, Allan (Bootle)


Home Robertson, John
Robertson, George


Hoyle, Douglas
Ross, Ernest (Dundee W)


Hughes, Robert (Aberdeen N)
Ryman, John


Hughes, Sean (Knowsley S)
Sheldon, Rt Hon R.


Hughes, Simon (Southwark)
Shore, Rt Hon Peter


John, Brynmor
Skinner, Dennis


Jones, Barry (Alyn &amp; Deeside)
Snape, Peter


Leighton, Ronald
Stewart, Rt Hon D. (W Isles)


Lewis, Ron (Carlisle)
Strang, Gavin


Lewis, Terence (Worsley)
Thompson, J. (Wansbeck)


Lloyd, Tony (Stretford)
Thorne, Stan (Preston)


Loyden, Edward
Tinn, James


McCartney, Hugh
Torney, Tom


McDonald, Dr Oonagh
Wallace, James


McGuire, Michael
Wardell, Gareth (Gower)


McKay, Allen (Penistone)
Wareing, Robert


McKelvey, William
Welsh, Michael


Mackenzie, Rt Hon Gregor
Wigley, Dafydd


McNamara, Kevin



McTaggart, Robert
Tellers for the Noes:


McWilliam, John
Mr. Frank Haynes and Mr. Norman Hogg.


Madden, Max

Question accordingly agreed to.

Resolved,
 That the draft Town and Country Planning (Fees for Applications and Deemed Applications) Regulations 1983, which were laid before this House on 25th July, be approved.

Resolved,
That the draft Town and Country Planning (Fees for Applications and Deemed Applications) (Scotland) Regulations 1983, which were laid before this House on 26th October, be approved.—[Mr. Major.]

Orders of the Day — Rate Support Grant (Scotland)

The Under-Secretary of State for Scotland (Mr. Michael Ancram): I beg to move,
That the Rate Support Grant (Scotland) Order 1983, a copy of which was laid before this House on 29th July, be approved.
In making this order, my right hon. Friend the Secretary of State was in one sense—and only in one sense—breaking new ground. For the first time this year he has separated from the main rate support grant order for the year ahead the variation order which affects the grant in payment in the current year. Hitherto, the variation of the current year's grant and the proposals for grant in the year ahead have been taken together and debated in January. My right hon. Friend considered it desirable this year to take steps not only to let local authorities and the House know before the summer recess the amount by which he intended to reduce the rate support grant payable to Scottish local authorities this year in order to bring their expenditure more into line with the Government's plans, but to start reducing grant to individual authorities earlier in the financial year. The effect of the order is to reduce the amount of rate support grant for 1983–84 and to enable the reductions in grant to be made more gradually over the rest of this year instead of concentrating them in the short period following the approval of the rate support grant order for the next year, as has been the case up to now. In short, it affects cash flow. This will enable authorities to make the economies we expect them to make over a longer period, and therefore in a more planned and effective way.
Perhaps I might remind the House that the Secretary of State obtained the power to make this order under section 3 of the Local Government and Planning (Scotland) Act 1982. That section provides a general power to reduce or increase grant as circumstances demand and provides for the full implementation of cash planning of rate support grant. In that respect, it corresponds broadly to section 61 of the Local Government, Planning and Land Act (No. 2) 1980 applying to England and Wales. The previous statutory provision in section 4 of the 1966 Act as amended did not enable the Secretary of State to reduce grant though he could in effect do so by adjusting the amount of the increase order, but this is no longer relevant in terms of cash planning.
My right hon. Friend would have been only too glad not to have been obliged to make this order. Ever since 1979, he has been persuading, cajoling and exhorting Scottish local authorities to bring their levels of expenditure more into line with what the country as a whole can afford. Every year, unfortunately, he has had to make some general abatement of grant to bring pressure to narrow the difference between the Government's clearly stated plans and the level of provision proposed by local authorities. This year, as he informed the House on 27 July, local authorities have still not brought their expenditure into line with the Government's plans. For 1983–84 their planned expenditure has been £120 million, or 4·5 per cent. higher than he proposed in the relevant settlement for rate support grant. What was in the settlement was higher than the figures originally proposed in the preceding public expenditure White Paper published in March 1982 by £145 million. My right hon. Friend has all along been remarkably tolerant in making higher assumptions of

expenditure for the purpose of allowing local authorities to come into line more gradually with the Government's plans for their expenditure.
Opposition right hon. and hon. Members will undoubtedly say that the variation order which we are debating would reduce the RSG payable this year by £45 million — a higher general abatement than the £27 million in each of the preceding two years. [Interruption.] I am pleased that I have read the mind of the hon. Member for Glasgow, Garscadden (Mr. Dewar). My right hon. Friend has had little alternative but to withhold more across the board than in earlier years since the lower grant reductions failed to have the desired results. However, I point out that the amount withheld would have been greater if the House had not approved reports reducing by nearly £19 million the rates and expenditure of four local authorities whose proposed expenditure was excessive and unreasonable.
That selective action has two beneficial effects. First, it ensures that the reduction in expenditure by those authorities is reflected in the lower level of rates payable by domestic and non-domestic ratepayers alike. Secondly., the reduction in their case is directly related to their degree of overspending. That does not apply in the case of general abatement, except that the Secretary of State will make arrangements to ensure that no authority will suffer a loss of grant greater than its excess at outturn over current expenditure guidelines for 1983–84. The first step in that adjustment will be made in the settlement for 1984–85 and possibly before. My right hon. Friend fully recognises that the present arrangement, which distributes the penalty in the same way as the original distribution of grant, is unfair on those authorities that exercise prudence in their financial affairs and heed what the Government have been asking them to do for five years.
Apart from the special arrangement I have just mentioned to cater for those authorities whose expenditure remains close to or within guidelines, the effect of this order is to abate grant for all authorities on the pattern of the original distribution of rate support grant for 1983–84. That includes the four authorities which have been the subject of selective action.
As my right hon. Friend has said in the White Paper published on 31 August with proposals for reform of valuation and rating in Scotland,
This means of reducing expenditure does not concentrate on those high spending authorities which should bring down their expenditure … The Government believe that a fairer system is needed. They propose to take powers which will enable the Secretary of State to relate an individual authority's share of any general abatement of grant directly to the authority's planned level of expenditure as measured against the authority's current expenditure guideline.
The legislation which my right hon. Friend proposes to bring before the House before the recess will, if enacted, have the result that in 1984–85 any variation order such as the one we are debating will be that much fairer in its effects. I believe that this will be generally welcomed, especially by those authorities which have been making genuine and responsible efforts to reduce expenditure.

Mr. Gavin Strang: How on earth can the Minister make this speech without the slightest reference to the enormity of the damage caused by these cuts? Will he refer to the thousands of teachers who are needed in schools but are walking the streets?

Mr. Ancram: I do not know whether the hon. Gentleman was here at the beginning of my speech.

Mr. Home Robertson: Yes, he was. There have been enough snide remarks from the Minister for one day.

Mr. Ancram: If the hon. Gentleman was here, he would have heard me talk about the level of expenditure in Scotland this year. Far from cuts, we are still looking at an overall level of local authority spending in Scotland which, in real terms, is higher than it was in 1979. For years, the Government have been making efforts to persuade local authorities that they should reduce their expenditure. In the absence of any genuine attempt by them, a general abatement of this sort becomes necessary.
The right hon. Member for Glasgow, Govan (Mr. Millan) drew a wholly misleading comparison on 27 July when he claimed that the general abatement of £45 million related to an excess of expenditure of £120 million whereas in the preceding year the penalty was only £27 million on an excess of £170 million. Those figures took no account of the effect of selective action which in 1983–84 is reducing excessive expenditure by £18·8 million whereas in 1982–83 it achieved a reduction of £31·5 million. The right hon. Gentleman and his friends — I shall be interested to hear what the Opposition spokesman says tonight — have always purported to support divergence of Scottish practice from that in England, particularly when it suited them. What in effect he appears to be asking for is a predetermined scale of penalty geared to the amount of overspend, but, as the hon. Gentleman knows, that is the English system. The Convention of Scottish Local Authorities categorically told my right hon. Friend in 1980 that it did not want to adopt the block grant system which has since been introduced in England. It preferred to keep the separate system of RSG which I believe is entirely appropriate to Scottish circumstance.
It is perfectly true that when the convention met me and when it later met my right hon. Friend it argued that the scale of general abatement should have been lower than what is set down in the order. It produced various arguments purporting to show that the scale of excess over the Government's planning figures should be regarded as less than £121 million. It has also argued that if at outturn the excess is lower than at present projected—I am sure we all hope that it will be, just as the final outturn figures for 1982–83 show that more local authorities kept within guidelines than we had feared would be the case—then the amount of abatement should be proportionately reduced. My right hon. Friend cannot accept that argument. The abatement is not set at any particular proportion of overspend. Rather, the Secretary of State uses his judgment as to what will persuade local authorities to reduce expenditure in the year. It would of course be easier for local authorities if they budgeted lower rather than having to make savings during the year.
The House will want to know what the effect of the abatement will be on the level of services. In real terms, if this abatement is fully reflected in expenditure reductions—we would of course hope that authorities would at least achieve this—the level of expenditure by Scottish local authorities would remain higher in real terms than in any previous year except 1980–81; and it will still be some 2·1 per cent. in cash above the level provided for

in the Government's plans. In these circumstances, it cannot be said that local authority services are being cut to the bone or that the Government are demanding unreasonable reductions in expenditure by this grant reduction.
I hope that the lesson will be learnt this time that budgeting in expectation of a general abatement makes an abatement more certain and probably higher. The Government are looking for reductions in real terms, because we have an overall responsibility for public expenditure, of which local authority spending is part, that we cannot ignore. Local authority spending accounts for nearly one quarter of public expenditure. No Government can afford to disregard what is happening there.
I should prefer to achieve restraint by co-operation, but this year in the budgets fixed by local authorities there are few signs of co-operation and, therefore, this order is necessary.

Mr. Donald Dewar: It is no new experience to hear the Minister introducing measures of this kind. This regulation is one of an endless dreary succession which, over a period, have done a great deal to undermine local government rights in Scotland and restrict the freedom of democratically elected councillors to respond to local needs, to act to meet them and, ultimately, to be answerable to their electorates.
I believe that the Government always hope that the technical nature of Scottish local government, the plethora of rules and regulations, the fact that one often has to return to statute and amendment piled upon statute to discover exactly what will happen, will hide from the public what is afoot and what the Government are doing. The Government rely on boredom to disguise their intent. Having listened to the Minister, I can see that he has a certain talent for that kind of campaign, which I suspect has been recognised in his promotion.
The other great ploy which, inevitably, the Government use, is to blame local government for all the ills that Government policy has created. Local government has the unfortunate job of delivering service and, to a large extent, has no control over the resources which it has to do that. As it is at the point of delivery, it is in the firing line, and having created the crisis, Ministers then turn and with a sleight of hand which I believe borders on the fraudulent, point the finger at the local authorities and blame them for what has been happening.
The regulations are an example of exactly that. In a few brief lines, with a dash of the ministerial pen, £45 million is suddenly spirited away and here we are granting a serious principle. We object to what is happening. We object to it for what it is and for the way in which it is being done.
I can match a cliche with the Minister at any time. I have in my notes the phrase "cut to the bone". The hon. Gentleman went out of his way to pour scorn on that phrase and to say that there was no justification for it. I can only say that although he may sit and listen to local government representatives he obviously does not comprehend what they are saying. He must take an extremely cynical view of the advice offered to him, not just by Labour councillors who have been elected to control large parts of the local government machine in Scotland, but also, to be fair, repeatedly by Conservative local councillors as well. We have representatives from areas that are Tory in their


general political outlook but which are feeling exactly the same pressures as their Labour colleagues in view of the parsimony of the Secretary of State for Scotland. For example, the anger that Glasgow district councillors have shown in the Tory interest over the improvement and repair grant is reflected in many other areas of local government as people see what is being done to them.
I accept that on occasions there is an element of shadow boxing in all the confrontations between local and central government. After all, everyone is trying to push their case to gain an inch here or an inch there. But the days of shadow boxing are now over and we are—I make no apology for using the phrase—cutting to the bone when it comes to services, whether in social work, education or any other major area where there is an increasing need and a decreasing provision.
I notice that the Under-Secretary of State for Scotland, whose constituency used to be Renfrewshire, East but is now Eastwood (Mr. Stewart)—I fear that the beast is the same in the end — said quite cheerfully, "Disgraceful," at one point, about Government expenditure in Scotland. I agree—it is, but in a different way from the way in which the hon. Gentleman used the word. It is a disgrace that we are seeing the clear deterioration in the services that the British people have properly come to expect. I suspect that some of my hon. Friends in the course of this unfortunately short debate will give examples of the exact impact on their areas and the services in those areas that are so important to their constituents.
The details of the regulations are important, if somewhat technical. The abatement of £45 million has the effect of reducing the percentage of the rate support grant from 61·7 per cent. to 60·3 per cent. That is a significant reduction, which the Minister should have acknowledged. We dislike the arbitrary way in which it has been done. It is remarkable that we are talking about an abatement of £45 million in the 1983–84 financial year in November.
I presume that it is common ground between the Minister and myself that the excess is £121 million. That is the excess of local authority budgets over the total provision made by the Secretary of State in the guidelines, Plus the rather eccentric exclusion of £124 million, which was a new and puzzling factor in this financial year. We must deduct from that excess the proceeds of the selective action, to use a neutral term—the smash and grab raid, mounted by the Secretary of State against a small group of authorities. That netted £19 million, leaving £102 million as the excess in which we are interested.
I say in passing—I shall not make a great deal of it because I am not qualified to pass judgment, having been unable to check this in any detail—that I have been told by COSLA, and I tend to think that there is something in it, that another £10 million can be deducted from that £102 million because of the dispute over national insurance payments. COSLA says that the Government have failed to rectify a mistake in their previous calculation. However, let us not worry about that. The excess ranges between £102 million or £92 million. If the £45 million abatement is set against the lower figure of £92 million it amounts to just above 50 per cent., or, against the higher figure of £102 million, to just below 50 per cent. That is a substantial clawback of the excess.
The Minister was right to anticipate my argument. It is a damn good argument but the fact that he anticipated it does not mean that he answered it. Therefore, I shall

rehearse it. There is inconsistency in the Government's approach to local government. There is a remarkable contrast with 1982–83. The excess then was not £121 million but £173 million—that is after deducting £30 million for selective action. Therefore, the true comparison is with the £19 million deducted, £102 million in 1983–84 compared with £173 million in 1982–83. In 1982–83 we had an abatement of £27 million. That is a much smaller percentage of the excess that was then being clawed back than the £45 million that we are being asked to contemplate as a percentage of this year's excess, even taking the Minister's figure of £102 million, leaving out the £10 million.
There is no explanation, logic or consistency in what the Minister said. The whole thing emerges mysteriously. We do not even know whether the £45 million was picked because the Treasury dictated it or because there was a gap in the cuts that the Treasury had decided the Scottish Office should find. We do not know whether the Secretary of State was given instructions. We do not know whether the proposal was just dreamed up one day over coffee in Dover house between the Secretary of State and his satrap, the Under-Secretary of State. We ought to know. It is not good enough for the Minister blandly to say that the Secretary of State used his judgment. What on earth does that mean? His judgment is, to say the least, fallible. Presumably, even if he used his judgment, he must have had some criteria or framework within which to exercise his judgment. As the discrepancy between what happened last year and what is about to happen is so startling, the Minister owes us an explanation.
We strongly object to the amount that is being clawed back this time. We base our case on the comparison and, more directly, on the devastating effect on services that are already living too dangerously when measured against need. This is important We also object to the methodology by which the £45 million will be taken from the victims in local government. I understand that there is some protection for authorities that have an excess over guidelines that is less than 4·898 per cent. That extraordinary figure has emerged. I understand that it is explained by the £124 million that was not allocated. I understand that that is of importance. However, we object to the fact that that saving clause and the calculation and apportionment of the abatement among individual focal authorities will be based on the local authorities' budgeted figures and not on their outturn figures at the end of the year.
Perhaps that is a technical point. It sounds complicated, but it is of great practical importance, as my hon. Friends will recognise. If we consider what happened in 1982–83 —I am sorry to go back but that is the best way of illustrating the point—we had the same escape clause for "good"—I stress the inverted commas—local authorities that the Minster wished to exempt. When the Minister considered the authorities that had budgeted and that would escape because they were at or under the guidelines, he found that there were 12. He found three authorities with a greater share of the abatement than Their excess over the guidelines, so they required compensation. The goodies numbered 15. However, that was on budget. The Minister knows what I am about to say. It is important. When we came to the outturn in 1982–83, there were not 15 but 26 that were not due for apportionment or that were to be compensated. It was not all one way. I accept that. Edinburgh had proudly become a goody and


had earned its Brownie points by budgeting for a figure that was within the guidelines. At the end of the year when the outturn was examined, it was over the guidelines. Perhaps the Minister will make it clear to me whether that authority had to bear part of the general abatement.
However, the trend was clear. When we got the outturn, many more authorities were included. The picture was different from what it was in the middle of the year when the budgeted figures were examined and this shady operation was being put into practice. The 26 authorities were paid £4·6 million, and there was no reduction in the abatement. As a result, the other 39 authorities had to meet increased burdens.
This year's budgeted figures show that nine authorities will not bear the burden of the general abatement. When we deal with the outturn figures, almost certainly more than nine authorities will be involved. At the moment the other authorities will have to find the £45 million between themselves and about £6·2 million will be added as a result. The present position is totally unsatisfactory and riddled with inconsistencies. Even the guidelines are highly suspect. Leaving that argument aside, it is quite wrong that we should have to work on budgeted figures when experience has taught us that they may be inaccurate and result in great unfairness.
I am in complete agreement with COSLA that it is logical to reduce the abatement on the outturn figures when available or to make the abatement at the same percentage of a smaller figure. Presumably the figure of £121 million will be reduced when the outturn figures are available because some authorities will have spent less than their original budgets.
This is a technical matter, but it has a great bearing in equity. I am sure that the Minister is extremely familiar with the arguments as they have been shouted at him from every quarter of local government in the past few months and repeatedly by COSLA. A doubtful and obscure process has had an unfair and arbitrary effect. Will the Minister re-examine the machinery and try to improve it? If the outturn figures will lower the excess, as happened last year, the abatement should be lowered proportionately if not absolutely. For the Scottish Office to insist that it wants £45 million and to say that the fact that the excess is much lower is totally irrelevant does not enhance its reputation. Local authorities can demand and expect considerably fairer treatment than that.
The regulations are unfortunate, as is the process in which we are being invited to participate, albeit unwillingly. Much talk has taken place about the future of this process. The White Paper on rating and valuation made specific proposals, which I promise the Minister we shall examine in great detail when the legislation reaches the House.
My hon. Friends will remember other interesting proposals in the White Paper, especially those dealing with consultation. One suggestion is that local authorities must consult non-domestic ratepayers before a rate is set and I understand that a code of practice may enforce such consultation. In referring to consultations and codes of practice, a strong case can be put forward for enforcing a code of practice on Ministers consulting local authorities.
A note issued by the Scottish Office referring to the regulations states in the last sentence:

The Secretary of State invites the views of the Convention on his proposal to reduce rate support grant in 1983–84 by £45 million.
Although the Secretary of State invited the views of the convention on his proposals, he did not listen to them. This is another example, irrespective of the value of the argument and the strength of the case, in which the prejudices of Ministers have totally overruled common sense. It is also another example of how the lack of consultation, common sense and flexibility have done great damage not only to the relationship between central and local government but, more tragically, to the level and provision of services in almost every constituency.

Mr. Bill Walker: I rise to speak against the order. I hope that my hon. Friends on the Front Bench will understand that this has not been an easy decision to make.
The order seeks to adjust the level of grant paid by central Government to local authorities for the purpose of bringing the authorities' expenditure more in line with the levels assumed in determining the rate support grant.
When the House debated the No. 2 Order for 1982, my right hon. Friend the Secretary of State said:
If authorities keep total expenditure reasonably in line with the settlement assumption, there should be no need for action to cut grant, whether by selective reductions or by general abatement."—[Official Report, 17 January 1983; Vol. 35, c. 89.]
Sadly, as everyone knows, local authorities have consistently borrowed, budgeted and spent more than successive Governments would have wished or had assumed. My complaint is that the prudent low-spending and low-borrowing authorities—I emphasise the latter—have been doubly penalised.
The historical basis on which guidelines were introduced meant that authorities with a long record of thrift had with the passing of each year—due to the ratchet effect of measures introduced by successive Labour and Conservative Governments—less and less fat and less room for manoeuvre.
If compared with the guidelines, the Perth and Kinross district council's record of budgeting and expenditure reveals that every effort has been made by that authority to comply with the expenditure guidelines issued by the Government of the day. Only once in seven years, up to and including 1982–83, did Perth and Kinross exceed the guidelines, and then only in terms of November 1980 prices. In every other year the council has performed within the guidelines and kept its borrowing well down.
For doing so it is doubly penalised because in the same years the rate poundage charged by Perth and Kinross district council has been among the lowest of all district councls that carry out a full range of services. Only the smaller authorities in Dumfries and Galloway and Highland and Borders, which do not provide all services, including planning, have lower rates.
Indeed, it is interesting to compare the 1982–83 rate poundage for Perth and Kinross with those of some other authorities. In Perth and Kinross it was 14·5p; Kyle and Carrick 35p; Argyll and Bute 37p and Stirling 40p. I do not suggest that those are proper or adequate comparisons, but they are sufficient to show that there is a massive difference between 14·5p in the pound and 40p, whatever the other difference may be.
The same pattern is true of earlier years. In 1976, the rate poundage in Perth and Kinross was 29p; Kyle and Carrick 52p; Argyll and Bute 6p; and Stirling 46p. Therefore, the pattern has been consistent for many years.
Rate poundages alone do not make my case. One must compare the average domestic rates bill to complete the picture. The following figures, which include regional council rates that produce some distortion, still paint an interesting picture. In 1982–83, the average rate bill in Perth and Kinross was £239·89p; Kyle and Carrick £396·18p; Argyll and Bute £287·63p; and Stirling £355·44p.

Mr. John Maxton: Will the hon. Gentleman give way?

Mr. Walker: I shall do so when I have given the final figure, which is important. In the whole of Scotland, the average figure was £313·62p. If £313 is the average for the whole of Scotland, and Perth and Kinross stands at £239·89p, that clearly shows how prudent that authority has been.

Mr. Maxton: Instead of quoting Stirling, why does the hon. Gentleman not give the figures for the two highest domestic rate burdens in the district councils of Bearsden and Milngavie and Eastwood? Why not use that comparator rather than Stirling?

Mr. Walker: The hon. Gentleman obviously has not listened carefully to the case I was putting. I tried to select authorities that could at least be suggested as comparable. I do not think that is unrealistic. After all, Perth and Kinross is largely a rural area with one large city. I selected the others because it is reasonable to say that they are comparable. I have not attempted to compare Perth and Kinross with any major cities because that would be unrealistic. I am not attempting to hide anything. The hon. Gentleman should realise that I am not speaking in favour of what the Government are doing. I am doing the opposite. I had to make a case that would stand up to examination by my right hon. and hon. Friends. That is why I have not picked the nonsensical examples that have been suggested by the hon. Gentleman.

Mr. George Foulkes: Would the hon. Member clarify that? It was not clear to me whether he said that while he is speaking against what the Minister has proposed he intends to vote against it and put the courage of his convictions clearly on the record.

Mr. Walker: The hon. Member should know that the one thing I do not lack is the courage of my convictions. I have never been accused of that in my life. I hope that the hon. Gentleman is not suggesting that this evening. The case I am presenting will stand up to close and detailed examination.

Mr. Maxton: That was a nice answer about the hon. Member's courage but it did not answer the question whether he will join us in the Lobby tonight. That is where he ought to be if he is to stand firm to his convictions.

Mr. Walker: Again, that is a most interesting intervention. I would have thought that the hon. Gentleman would have looked carefully at my voting record on matters on which I have spoken against the Government. I have never hesitated in the past to back by my actions what I was saying. I shall do so tonight. I have advised the Front Bench that this will happen.
Let us consider carefully the expenditure per head of population because that is most important. At the end of the day the individual ratepayer and taxpayer has the right to ask what he is getting in return for what he is paying. I remind Opposition Members that a substantial part, indeed the bulk, of local authority expenditure is paid for by the taxpayer. We should never forget that. The taxpayers in Perth and Kinross have every right to ask why they are being doubly penalised because the expenditure per head of population by the prudent authority in Perth and Kinross is £76·04 while in Kyle and Carrick, the amount is £123·95, in Argyll and Bute £146·74, in Stirling £133·73 and in all of Scotland £127·81. That shows clearly that the taxpayers of Perth and Kinross district council are getting less for the taxes they pay because their prudent authority has been doubly penalised by the actions of successive Governments.
This is not the first occasion on which I have pleaded in these debates that something should be done for prudent local authorities which have acknowledged the wishes of successive Governments. Perth and Kinross has been an exemplary council, yet it cannot increase its rate poundage under the present or proposed rules by even as little as 2p or 3p to bring its expenditure up to the level that it deems necessary in circumstances that have been created by the compounded ratchet effect. The authority's spending plan requires that next year it spends £7 million, yet the guidelines stand at £5·45 million. That takes some bridging. The gap could be bridged by the council, subject to inflation and other factors, by an increase of no more than 2p or 3p. Bearing in mind the low level of rate poundage and the low level of expenditure per head, if we are logically to give justice then we must acknowledge that something must be done.
I could make a similar plea for my other local authority. Angus district, which also has a fine record. Under the new proposals authorities with large borrowings and large interest rate payments are again benefiting at the expense of the prudent, thrifty authorities. That is not good enough.
In every debate on local authority funding I have pleaded for adequate—I use the word carefully—special consideration for thrifty authorities. My pleas have failed to produce a realistic response from the Government. I cannot help but compare the performance and treatment of other local authorities —I pick at random the Kyle and Carrick authority—with my two authorities. I am upset at the treatment given to my authorities.
I support the Government's aim to reduce local authority expenditure. I support them in their measures to bring the economy into balance. But I cannot support broad brush, insensitive measures that penalise the prudent and the thrifty.

Mr. Foulkes: As the Secretary of State for Scotland, who represents part of Kyle and Carrick, cannot be present, I, as one Member representing that area, must ask the hon. Gentleman to give the House some examples from the Kyle and Carrick budget where its expenditure is excessive and unreasonable. I have examined the budget in great detail and I think that it is underspending. I am constantly under pressure from Kincaidston for additional expenditure for libraries and community centres. I am also under pressure from Girvan and Maybole for additional expenditure on facilities.
As the hon. Gentleman appears to have carried out a great deal of research into the Kyle and Carrick budget, will he give some examples of its excessive and unreasonable expenditure?

Mr. Walker: It is sad when a hon. Member makes a long intervention that should have been a speech. It is even sadder when that intervention shows clearly that the hon. Gentleman has not listened to my case. I am not suggesting that what Kyle and Carrick or any other authority might be doing is necessarily wrong. I am saying that the differences between the councils, and the differences in treatment in the past, the present and the probable future, are so vast that Perth and Kinross district council merits special treatment. I trust that the hon. Gentleman will realise that, as a simple businessman and not a clever chap like him, I cannot possibly at the drop of a hat suggest where the Kyle and Carrick council can make savings. However, I can suggest that that council visits Perth and Kinross, which can provide the same services much more efficiently and economically.
Even the new plans for calculating local government spending and funding will penalise the thrifty, low-borrowing authorities. My complaint is not about moderate future spending, but about the borrowing and spending patterns of the past. My hon. Friend the Minister said that the Government had been remarkably tolerant. Indeed, they have been far too tolerant of the high-spending authorities at the expense of the prudent authorities. Not nearly enough has been done since 1979. I have said that in previous debates. If the Government are determined that a certain amount is all that the nation can afford to spend in a given set of circumstances, they should share the pain equally. More importantly, those who have been responsible for producing and creating much of the pain should be penalised more than others.
I was interested that my hon. Friend the Minister said:
The Government propose to take powers which will enable the Secretary of State to relate an individual authority share of any general abatement of grant more directly to the authority's planned level of expenditure as measured against the authority's current expenditure guidelines.
This does not take sufficient account of past borrowing and present interest charges. That is, the high spending and borrowing authorities of the past still benefit at the expense of the thrifty authorities. That is why I advised my Front Bench and the Whips that I could not support the order tonight. I shall listen carefully to what is said in the winding-up speech, and if I get no response to what I have said, I shall support my views in the Lobby.

9 pm

Mr. Malcom Bruce: I listened with some interest to the speech of the hon. Member for Tayside, North (Mr. Walker) and I have some sympathy with his view. However, I would have much more respect for it if he had widened the argument to take account of what development the Government are pursuing. The Government are advancing a stage further in undermining, and eventually destroying, the concept and validity of local government. I do not challenge the Government's right to set the rate support grant. I accept that the Government's contribution to local authorities is through the rate support grant, and if that were being set in isolation the Government's position would be acceptable.
However, it is being set not in isolation, but against the background of the refusal to follow through local government financial reforms.
Althought we were told that the last manifesto did not promise to abolish rates, I remember a number of Conservative candidates in the general election making such unequivocal and unqualified promises. The hon. Member for Banff and Buchan (Mr. McQuarrie) is not here, but I represent the next constituency to his and I was fully aware of his publicly stated commitment to this principle.
The Government are abandoning their commitment to reform of the rating system and they have taken control over local authorities, when they cannot even relate to local authority needs. Grants may be capped if they try to compensate. During the course of the year, the Government say that the budget must be changed. Every local authority, whatever its political complexion, must be beginning to find it difficult to live with that.
The Government claim that they are concerned about securing efficiency in the running of the country and in all local authorities. It does not seem possible that a local authority can operate efficiently if it is continually faced with new Government orders to reduce budgets or cut expenditure. The net result is inefficient management of local authorities and perpetual crises in local government, which makes it impossible to set or follow established priorities. That is the problem facing local authorities.
The Minister showed little concern for the dedicated people who work for local authorities in Scotland. I am talking about people who put themselves forward as councillors, of all or no parties. They are prepared to give up time to discuss issues and raise budgets only to find that the time has been wasted because the Minister overrules their decision. The many staff who work long and hard trying to draw up difficult priorities and work within tight budgets and financial restrictions find that they are being penalised. As the hon. Member for Tayside, North said, even when the Government make cuts and feel justified in making them, the cuts do not fall evenly and fairly. Many councils are trying to operate within restraints but are still facing cuts and being penalised.
If the Minister is concerned about local democracy, he should do something about reforming the system of local government instead of seeking to abolish it and giving power to the centre. That is exactly what the Minister is doing. His policy will ensure that in a few years local government will simply cease to exist.
While the Minister is asking local government to act as his agent, a Standing Committee is considering the Tenants' Rights, Etc. (Scotland) Amendment Bill, which could well involve local authorities in increased expenditure. Nevertheless, the Minister reserves the right to cap the rates. I hope that the Minister will accept the consequences of a decision of this nature in terms of the specific services that many authorities will have to cut. I have talked to a number of local authorities' representatives today to find out what effect they believe the cuts will have. They tell me, for instance, that they are already having difficulty in maintaining a reasonable road network in Scotland, particularly the local roads for which the local authorities are responsible. They say that the road network is being undermined because they cannot repair it, and that in a few years' time some roads will require massive


expenditure. The Government are cutting expenditure now, but some Government later will have to pay a lot of money if there is to be a decent road network.
I am particularly anxious about the implications for education. I believe that the Government—certainly the local authorities—are considering programmes, in the light of falling school rolls and Government cuts, to close many small schools. In Grampian, my authority, we have already started a programme that will lead to a reduction in the number of small schools in Aberdeen. As I represent a rural area, I have grave doubts whether we shall be able to maintain small rural schools over the next few years. I also doubt in the light of representations now being made, whether there will be any chance to reduce the number of the large composite classes in rural schools.

The Under-Secretary of State for Scotland (Mr. Allan Stewart): Surely the hon. Gentleman will concede that composite classes have always existed in rural schools.

Mr. Bruce: Of course I acknowledge that composite classes have always existed. I do not argue that composite classes should not exist. What concerns me is the size of composite classes in a number of schools, with more than 25 pupils. Those classes should be smaller. They will require more resources, although with measures of this nature it will be impossible for local authorities to provide those resources. With a programme to reduce the numbers of large composite classes, a decision of this nature will make any progress in that direction impossible.

Mr. Barry Henderson: Is not the hon. Gentleman aware that in Scotland pupil-teacher ratios are more favourable today than they have ever been?

Mr. Bruce: As the hon. Gentleman knows, a simple global statistic of that kind is right, against the background of falling school rolls and a falling population. Rural schools are being closed and threatened with closure. In view of the constituency that the hon. Gentleman represents, he would be unwise not to recognise the dissatisfaction that people in rural areas feel about the threat to rural schools.

Mr. Bill Walker: I trust that the hon. Gentleman is not suggesting that rural schools have never closed in the past. Certainly in Tayside many more rural schools closed under the Labour Administration than have closed under this one. It is an evolving situation, and I hope that the hon. Gentleman agrees that always rural schools have closed with changing circumstances.

Mr. Bruce: I should not like to detain the House too long, but the hon. Member for Tayside, North has raised the subject of the future of rural life in this country. It is, of course, true that rural schools have closed, because during the past 20 years we have pursued a policy of no rural development, and there has been no policy to maintain services in rural areas. We have seen the closure of post offices, ambulance services, and schools. It is a continuing process. Only this week the Government said that they are not prepared to do anything to support positive measures for rural development. The hon. Member for Tayside, North simply says that rural schools have always closed and that therefore those of us who wish to fight that process should give up. I am sorry to have to tell him that I for one do not intend to do so.
I believe that the Conservative party claims to be concerned about the future of democracy. I have even heard it use the phrase "liberal democracy", although I am not sure that it means it in the same way as I do. However, the Government should be concerned about measures of expediency that seek to serve the Chancellor of the Exchequer but which may undermine the future of democracy in this country. It is not overstating the case to say that a democratic system needs checks and balances, and some diffusion. The Government are bent on a process that will centralise power in Whitehall. Although I do not suggest that the Secretary of State is a totalitarian subversive, he is creating the sort of machinery that would enable the country to be manipulated more easily by someone. That may seem to be an exaggeration, but local communities have a right to express their own identity and to determine their own priorities.
Given this measure, the Government's refusal to reform the rating system, and their desire to take detailed control over every aspect of local democracy, it is little wonder that councillors of every persuasion and none in Scotland are disillusioned. Only last weekend a Conservative councillor in my constituency said that, as a result of the Government's policy, there would be no local government in Scotland—[Interruption.] Ministers may say rubbish, but they will need to do more than that if they continue to pursue such measures. My colleagues and I will oppose the order.

Mr. Nicholas Fairbairn: The debate essentially concerns an abatement of what the Government are offering to local authorities. I am entirely in favour of the idea that the Government should take close control of the expenditure that is levied on some citizens who have to pay local authority rates.
I hope that the hon. Member for Gordon (Mr. Bruce) will appreciate my next point, because I am equally concerned about local democracy. The tragedy of local government is that very few people take part in it or vote in the elections. An even greater tragedy is that many people benefit from excessive local authority expenditure without having to contribute. That must be understood.

Mr. Maxton: Mr. Maxton rose—

Mr. Fairbairn: I shall not give way at the moment.

Mr. Dennis Canavan: Why not?

Mr. Fairbairn: I can tell hon. Members exactly why I shall not give way. I am not sure who said, "Why not?" but I think that it was the failed monk on the Front Bench below the Gangway, the hon. Member for Falkirk, West (Mr. Canavan). I shall give way later to the hon. Member for Glasgow, Cathcart (Mr. Maxton) because I love giving way to him. However, I shall not give way now, because so far he has not said anything very helpful or constructive in an intervention. I shall develop my argument first before giving way to him.
If the Government are going to abate expenditure, they should do so fairly. If the purpose of abatement is to control extravagance and to reward thrift —which it should be—why is that not being done? We are talking about next year's position. We need only look at the figures for the local authority of Kyle and Carrick, mentioned by my hon. Friend the Member for Tayside, North (Mr. Walker) and at the district of Perth and


Kinross. It is similar to Kyle and Carrick. It has a similar population, though greater; it is landward although larger; it has infinitely more responsibilities—

Mr. Foulkes: The hon. and learned Gentleman has been wrong in all the comparisons that he has made so far. Kyle and Carrick is not landward — it has a huge coastline. It is represented not by two indolent Tories but by the Secretary of State for Scotland and an active Labour Member. If the hon. and learned Gentleman keeps going he will find even more ways in which Kyle and Carrick is completely different. One way is that it provides better services for the ratepayers, of whom I am one. I can tell the hon. and learned Gentleman that we want better services in Kyle and Carrick.

Mr. Fairbairn: That is a typically nonsensical concept. The idea that coastline does not involve any land — [Interruption.] The sea is on one side and the land happens to be on the other. I dare say that the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) is so simple that he does not understand the concept. The responsibilities of Kyle and Carrick are infinitely smaller. The services it provides are no better but they cost as much to the Exchequer. The percentage abatement of Kyle and Carrick's grant which is £2 million more for 1983–84 than that of Perth and Kinross is less. That shows not that the Government are wisely pursuing the concept of thrift and the provision of services according to the ability to pay, but that they have embarked on a formula that was set in train by the last Labour Government and from which it is high time they escaped.
All ratepayers are conscious of what they have to pay. Some authorities take the view that the more they spend the better will be their position, even under the present policy of my right hon. Friend the Secretary of State for Scotland. That, I regret to say, is true. The Government must ensure that authorities who indulge in thrift are rewarded for that thrift and those who indulge in extravagance and have indulged in extravagance do not escape.
It is unfair that Perth and Kinross district council, which promotes the great industry of tourism and has, since the Stodart report, had many more responsibilities in tourism, theatre and the rest—

Mr. Maxton: rose—

Mr. Fairbairn: It is important that my right hon. Friend the Secretary of State, in examining the proposal—

Mr. Canavan: Will the hon. and learned Gentleman give way?

Mr. Fairbairn: Not at the moment. I might if the hon. Gentleman takes his hands out of his pockets. The hon. Member for Cathcart has priority.

Mr. Maxton: How much money has Perth and Kinross district council, which the hon. and learned Gentleman and his hon. Friend the Member for Tayside, North (Mr. Walker) have been building up, contributed— I know that the hon. and learned Gentleman is a cultured man —to the Scottish National Orchestra, the Scottish Ballet and the Scottish Opera? Presumably members from those

district councils travel to Glasgow and Edinburgh to see performances by those organisations, so why do they not contribute?

Mr. Fairbairn: That is not a valid matter because those institutions are, or should be, funded essentially by the Scottish Arts Council. The hon. Gentleman will remember that the reason for any contribution for instance to Scottish Opera from Glasgow district council is that the Theatre Royal is in Glasgow. If Glasgow district council did its duty by Scottish Opera, it would not be in the financial trouble it is in. The council encouraged it to create its headquarters there, yet it will do nothing about it. But that is a sideline into which I do not wish to be distracted.
It is important for the policy of the Government to be a policy in which thrift is the guiding factor for all in local government. We cannot have a situation in which, of equivalent authorities, some are spending twice as much of the ratepayers' money as others and as a result are benefiting by £2 million; in which the Government then say, "You will all be punished," but where the naughtiest are punished least and those who have behaved the best are punished most. I say that to the Minister in the kindest way on the basis that he should do well by those who have been least naughty.

Mr. Canavan: The hon. and learned Gentleman should be hung like some of his clients were.

Mr. Fairbairn: The Minister will understand that there are more serious matters than that frivolous one raised from a sedentary position by the hon. Member for Falkirk, West. It demonstrates that he has no knowledge of English or fact. I have defended 17 people for the death penalty and none has been hanged and, in any case, it is "hanged" and not 'hung".
If the policy is to work—and I want it to work—we must ensure that the guidelines for those who are thrifty are not absurdly ungenerous compared with the guidelines for those who squander and are extravagant. The list of local authorities, which is available for all to see, demonstrates that the policy hitherto benefits extravagance. The abatement tonight in a minor way emphasises the benefit of extravagance and the penalty of thrift, and Perth and Kinross district council is an example. I trust that the Minister will bear that seriously in mind in any future assessment of the control of local government expenditure.

Mr. John Home Robertson: Of the many themes adduced by the hon. and learned Member for Perth and Kinross (Mr. Fairbairn) on which I might comment, on reflection I think that I will not comment on any. I will simply put him out of his misery by saying that I understand that Perth and Kinross district council will get back some of the money that it lost in the incredible formula operated by the Government, money clawed back in 1982–83, because the Government got their sums wrong. That demonstrates the Machiavellian workings of the scheme. But I would rather not dwell on the bizarre speech of the bizarre hon. and learned Gentleman.
I take up the remarks of the hon. Member for Gordon (Mr. Bruce) about the closure of rural schools, an issue about which I feel extremely strongly. I am the parent of two small children, one of whom will be going to primary


school next summer. I do not know whether the school which now serves the catchment area in the Borders region will remain open. The cuts that are being imposed by the Government on education authorities throughout Scotland mean that the authorities are having to review the continued existence of more and more primary schools. The school in the catchment area in which I live has a question mark hanging over it. If my four-year-old son goes to that school next year we shall not know whether it will still be open in the following year or the year after that. What can be more unsettling for a young child than this sort of uncertainty? This is one of the consequences of the policies that this demented Government are pursuing.
I was as ever disappointed—I suppose that I should know better than to be disappointed — by the supercilious attitude of the Micky Mouse Minister when he advanced his case of the order.

Mr. George Foulkes: My hon. Friend will be sued by Walt Disney if he continues in this manner.

Mr. Home Robertson: I described the hon. Gentleman in that way advisedly. How else can one describe a Minister in a Government who represent only 28 per cent of the electorate of Scotland? However, he calls himself a Minister. He has no more right to administer or advance legislation—

Mr. Canavan: The Under-Secretary of State, the hon. Member for Edinburgh, South (Mr. Ancram), is an earl.

Mr. Home Robertson: The hon. Gentleman is not yet an earl. An earldom may come to him in due course. I wish his father no harm, but in due course the hon. Gentleman will find himself in another place, unless we have abolished it before that happens. If he finds himself in that place, he will he able to propose legislation for Scotland. For the hon. Gentleman now to proppse legislation affecting Scotland specifically and exclusively is weird and something that will have to be challenged repeatedly until Scotland can have its own legislature. That is an issue to which we shall return time and time again.
We are hearing a great deal about prudence and thrift this evening. I suppose that those words are personified by the two Under-Secretaries of State. But which is which? I suppose that the hon. Member for Eastwood (Mr. Stewart), is prudence and that the hon. Member for Edinburgh, South (Mr. Ancram), is thrift. Perhaps it might be more appropriate to call them Scrooges in the spirit of Christmas past. The fact remains that they are taking £45 million from the budgets of local authorities this year.
What does that mean? At Question Time this afternoon the hon. Member for Edinburgh, South was being urged by the hon. Member for Banff and Buchan (Mr. McQuarrie) to take more money from local authorities' budgets. Why do they have such a hatred of those who provide public services? When they cut public expenditure and place restraints on local authorities, the result is fewer home helps for the elderly. Ministers will probably not wish to look me in the eye while I am on this subject because they know that I am speaking the truth. There are fewer home helps in my constituency. This has been the result, too, in the constituency of the hon. Member for Edinburgh, South. Public expenditure cuts in my constituency, which is in the Lothian region, have led to

the abolition of free concessionary transport for pensioners and reduced provision for schools. There have been cuts in housing and the standards of environmental services have fallen. I do not know where this process will end. Standards are continuing to fall throughout Scotland.
What authority do the Government have for taking this line? The order is significant. It is a scrappy little document that fills two sides of a nasty piece of paper. It says, in essence, that £45 million will be removed from local authorities' budgets in Scotland for no good reason. It was signed at new St. Andrew's house. Apparently. the Secretary of State has armed guards there. Scotland was paid a visit by one of Her Majesty's principal Secretaries of State, the right hon. Member for Ayr (Mr. Younger). It is significant that the order says "We consent'. and was signed by two of the Lords Commissioners of Her Majesty's Treasury, the hon. Members for Watford (Mr. Garel-Jones and for Calder Valley (Mr. Thompson). Both are English Members of Parliament. I am delighted that the hon. Member for Calder Valley has come to face the music. He might like to visit Scotland to see the consequences of his actions. He could tell us what he signed. Did he read the paper? Did he understand it? He does not answer. I do not know whether this is dumb insolence or innocent ignorance — either way, it is deplorable.

Mr. Henderson: Has the hon. Gentleman ever considered the logical consequence of his argument, which is that, with one exception, all the recent Labour Governments ruled England without a majority? I dare say that a number of Scottish Whips signed certificates for payments to local authorities.

Mr. Home Robertson: I fear, Mr. Deputy Speaker, that you might call me to order if I pursued that line, much though I would love to.
There is such a thing as United Kingdom legislation, as the hon. Member for Fife, North-East should know, because he has been on the Chairmen's Panel, although I suspect that he has been taken off it to increase the Back Bench manpower of the Scottish Tory group so that it can man Committees. I see that he is nodding, so I must be accurate.
Those of us who believe in devolution of power within the United Kingdom accept that there will always be United Kingdom legislation. It is right that Scottish Members should play their part. Today we are talking specifically about legislation that affects Scotland alone. The Secretary of State for Scotland said that he did not believe that there was any Scottish demand for an additional tier of government. I do not know where the right hon. Gentleman has been all these years. If he visited the Scottish Office and new St. Andrew's house—for which he is supposed to be responsible — he might notice that there is already a tier of government in Scotland that is badly in need of some democratic accountability.
I am sorry that the hon. Member for Fife, North-East, led me down that line because, Mr. Deputy Speaker, it is patently out of order. I assure you that I shall not proceed on that point.
Lothian region, which includes my constituency, has been hit during the current financial year. The hon. Member for Edinburgh, South enjoyed referring to it as the rogue elephant local authority. It still is. It has been taken over by Mr. Brian Meek. If ever I saw a rogue elephant, it is Mr. Meek.
I have enumerated some of the vicious cuts that he has imposed, which are causing serious hardship in my constituency and that of the hon. Member for Edinburgh, South. We have already had what the Under-Secretary refers to as selective action. This means that pensioners in Edinburgh, South and East Lothian no longer have free public transport. There are fewer home helps. We could carry on through the list. In schools more and more classes are affected. I suppose that what the Under-Secretary described as a prudent local authority is one that is not doing what its electorate asks.
The East Lothian district council has been through this before. As with the Perth and Kinross district council, the Government got it wrong. When the Government calculate compensation for abatements they consider local authorities' budgets rather than actual expenditure. It is not surprising that local authorities tend to over-budget because by doing so they can cover themselves against the type of smash and grab raid that my hon. Friend the Member for Glasgow, Garscaddan (Mr. Dewar) has described.
Two years ago—1982–83—East Lothian district council got on with the work that it was elected to do and suffered a cut parallel to that which we are debating this evening. When the outturn of expenditure was discovered at the end of the year it was found that the abatement of the rate support grant that East Lothian district council had suffered as a consequence of the order that the Tory Government had bulldozed through the House was greater than its excess over the guidelines. The Government had to repay it and I understand that they are in the process of doing so. The money goes round and round. The Government cut the rate support grant, take the money, find that they have their sums all wrong and have to pay it back. The Government's way of handling Scottish local authorities is contemptible. We have nothing but contempt for the way in which the Minister and his Administration handle these matters.
The Minister knows that these cuts cause damage in his constituency, as they do in mine. I am astonished that he should describe this action as thrift or prudence or anything that is in any way benevolent because it is not. It is downright destructive. The Government should withdraw the order, for a multitude of reasons including those advanced by the hon. Member for Tayside, North (Mr. Walker), whom we look forward to welcoming into the Opposition Lobby.

Mr. Barry Henderson: The hon. Member for East Lothian (Mr. Home Robertson) has forgotten that there is not just the United Kingdom and Scottish legislation but English legislation. I am certain he remembers that the then Secretary of State for the Environment, who held that office when his right hon. Friend the Member for Glasgow, Govan (Mr. Millan), who was Secretary of State for Scotland, demanded major expenditure reductions from Scottish local authorities without notice, used Scottish votes to vote through the rate support grant variation in England as well.

Mr. James Wallace: The argument that the hon. Gentleman puts forward is a good case for federalism.

Mr. Henderson: No; it is a good case for the maintenance of the United Kingdom.

Mr. Maxton: rose—

Mr. Henderson: If the hon. Gentleman proposes to follow this point—

Mr. Maxton: It is on this point.

Mr. Henderson: I shall not give way.

Mr. Maxton: It is on this point.

Mr. Henderson: I do not want unduly to detain the House, but the hon. Member for East Lothian raised a point which he seemed to regard as important. I feel that it is worth making a comment on it.

Mr. Maxton: I want to clear up a point. Will the hon. Gentleman give way?

Mr. Henderson: The hon. Member for East Lothian spoke in terms which I do not think he believed about the hatred of those providing public sector services. What a load of rubbish. Roughly half the Secretary of State's budget is devoted to providing support for local authority services but a large part of the rest of the budget is concerned with providing health services in Scotland.

Mr. Maxton: He has cut them.

Mr. Henderson: If he lets local authorities rip, what will hon. Gentlemen say if he does not look after the interests of our patients in our hospitals—

Mr. Canavan: He is not; he is killing them.

Mr. Henderson: He is a great deal more generous than the Labour Government.
The Opposition have not said a word about the interests of those who pay rates but a great deal about those who impose substantial rate increases.

Mr. Charles Kennedy: In my region it is estimated that the extent of the clawback proposed tonight is £1·6 million. The Highlands regional council director of finance has said that, were it not for that clawback, there could have been a rate cut throughout the region of 3p to 3·5p. The regional authority is not the culprit when it comes to raising the rates; the Government are.

Mr. Henderson: I shall leave that to my hon. Friend the Under-Secretary of State. I should be surprised if he did not draw attention to the fact that the Government made the nature of the guidelines and the rate support grant clear to Highlands region and every other local authority.

Mr. Kennedy: rose—

Mr. Henderson: If the hon. Gentleman had been here throughout the debate he would know that what I have said is true. Until he intervened no Labour Member had mentioned the concern of ratepayers in Scotland about the level of rates. It is undoubtedly a major concern to many people in Scotland.

Mr. Home Robertson: rose—

Mr. Henderson: The hon. Gentleman is in a frivolous mood tonight and I shall continue with my remarks, which I hope will not be too lengthy.
It is important that the Government should try to contain local authority expenditure in Scotland for two


reasons: first, on broad economic grounds; secondly, because if ever Parliament had a purpose it is to deal with the grievances of constituents. More people come to me with a grievance about rates and local authority expenditure than want my local authority to spend much more money. I have very few of the latter, and most of them are lobbies organised by vested interests.
Average spending per head of the population in Scotland has increased by over 10 per cent. in real terms since 1978–79. The staff of Scottish local authorities have increased by 6,000 since then despite the fact that teaching, one of the largest employment sectors in local government, has experienced substantially reduced school rolls.
Another curiosity, upon which I shall not dwell because it can be partly justified, is that the staffing in Scottish local authorities is more than 20 per cent. greater per head of the population than south of the border. We should seriously consider whether the substantial resources—hundreds of millions of pounds—that are spent in local authorities are being organised as effectively as possible.

Mr. Home Robertson: Let me put the hon. Gentleman out of his misery about Labour Members' concern for people who pay rates. Everybody who can afford to do so pays rates, with one exception — farmers. I should know.

Mr. Henderson: As a landowner and farmer the hon. Gentleman should know better. Farmers pay rates on their buildings, as other people do, and the hon. Gentleman knows that.

Mr. Home Robertson: rose—

Mr. Henderson: The hon. Gentleman had an opportunity to make his speech and he did not talk about ratepayers then.
I thoroughly approve of the selective action that has been taken against specific local authorities. It has substantially reduced the burden that would otherwise have applied to local authorities affected by the matter that we are debating. Without that selective action prudent local authorities would be suffering a much more severe penalty. We should all be grateful for that.
I welcome the fact that we are moving into a slightly better position on abatement, which no one likes in principle. Up to now abatements have been related to the rate support grant. In this case, the abatement was related to overspending. That is an important move. Those who have spent over the guidelines are more likely to have to pay back more than on the old basis. That is a move in the right direction. I agree with what my hon. and learned Friend the Member for Perth and Kinross (Mr. Fairbairn) said. I hope that my hon. Friend the Minister will be able to continue making the abatements fairer and more effective and providing more encouragement to authorities that have been prudent in the past.
Looking to the future, I have no doubt that other orders of this ilk will come up from time to time. There may be merit in the client group approach, to which my hon. Friend refers increasingly. I should like him to publish as much detail as he has discussed with the Convention of Scottish Local Authorities on the formula that has been applied and the methodology that has been used. While it might turn out to be a better way of assessing need and expenditure in local authorities, the methodology might

need more careful examination. It cannot be without significance that the authorities that have been enthusiastically telling my hon. Friend that they want the introduction of the client group approach are the regional councils. There is not one district council in that group.
When I look at the figures of local authority expenditure and the effects of the order, I wonder whether it has worked out well for the regional councils compared with district councils. I wonder whether one factor is that inadequate consideration has been given to the change of responsibility for tourism from the regions to the districts. I should be grateful if my hon. Friend would give wide publicity to the methodology adopted in the client group approach so that we might all have a close look to see whether it is as sound as I hope it is. When we are changing the systems for dealing with these matters, I hope that in a transitional phase some money will be held back by my hon. Friend to be used to help to solve transitional problems.

Mr. Hugh Brown: I should like to be brief because the House never does itself justice when it discusses, once or twice a year, this complicated matter of colossal sums of public expenditure. I am not sure whether I shall contribute any new or creative ideas. However, it would be a great pity if we did not address ourselves to some of the serious problems.
I have some respect for the application to duty of the hon. Member for Fife, North-East (Mr. Henderson). He talked about the differences in rate burdens between Scotland and England. I do not disagree with him. It may be true that the rate burdens in Scotland are 20 per cent. higher than in England and Wales—

Mr. Henderson: I was referring not to the rate burdens but to the staffing of local authorities per head of population.

Mr. Brown: I apologise. However, my point does not conflict with what the hon. Gentleman said. I am trying to suggest that that is a meaningless statement unless it is analysed, just as the rate burden per head of the population would be meaningless.
I shall give some examples. Water authorities are a slightly separate element in the English system. The level of housing expenditure is also different. There are many more council houses in Scotland than in England and Wales. It is extremely difficult to make accurate comparisons between Scotland and England or between authorities in Scotland.
I congratulate the hon. Member for Tayside, North (Mr. Walker) on his decision. Although he may be persuaded to vote with the Government, I respect his views. He is a man of independence and I like people who think for themselves. I am not sure whether the hon. Gentleman or his hon. and learned Friend the Member for Perth and Kinross (Mr. Fairbairn) is the voice of Perth and Kinross district council, as different views have been expressed on the same subject.
I do not query the accuracy of the figures that the hon. Member for Tayside, North gave, but he did not make it clear whether he was dealing with the total rate levy or merely with the district authority levy.

Mr. Bill Walker: I referred to the regional element as well. I said that the figures included the regional rate and the rest was the district element.

Mr. Hugh Brown: No two Scottish authorities are comparable. I do not know the population of Perth and Kinross but I do not think that the authority of Argyle and Bute is especially different. Both are Conservative-controlled authorities with similar problems of sparsity but they are not altogether alike because of the islands. That fact highlights the difficulty that Members of Parliament have in making a constructive contribution when dealing with such a detailed and complex subject. It has been examined by professionals and finance officers both in the Scottish Office and in local authorities. We are then asked at the last minute to approve or otherwise the expenditure of almost £2 billion when we do not have the expertise, resources or detailed knowledge to make the debate meaningful. I speak for myself. Other hon. Members may feel that they know more about the subject. I am worried about this because I do not think that we do justice to our task.
I recognise that any Government have the right to oversee public expenditure. I do not think that even the Lothian regional Labour group would dispute that this is all part of public expenditure, although it might argue about Government policy. If we wish to spend more on providing public services perhaps we should spend less on defence. We are all confronted by that problem, especially those of us in Scotland. Councillors are no longer willing to beaver away at providing local services and to be hammered for failing to fulfil election promises while at the same time recognising the public expenditure implications of — but having no status or locus in challenging — defence expenditure. I am not entirely happy about that political situation, but we cannot put the clock back.
The Government have reneged completely on two election commitments to abolish local rates. I know that that promise was not in the Conservative party's 1983 manifesto but it was most certainly in the 1974 and 1979 manifestos. There can be no quibble about that. If the Minister cares to look at the manifesto commitments, he will realise that any reasonable person would assume that the Conservative party gave the impression that it was committed to abolishing local rates. That is one of the reasons why I have always felt that a Scottish Assembly would have been a useful piece of machinery that could have given more time and attention to some of these complex matters. Given the present set-up, we should perhaps have a Select Committee on Scottish public expenditure because we are dealing with large sums of public money.
The Government should come clean. There is always room for saving in a local authority. My accusation—the Minister knows this better than anyone else—is that for years he has built up a reputation by attacking Lothian regional council. It is not because it is a wicked, Left-wing, extremist authority—although there is an element of that — but rather because local government is not popular.
Local government is the whipping boy, and always has been, because no one likes paying taxes or rates. When the Tories tell their friends that they will reduce taxation, it is also popular to add, "And we shall reduce rates as well." That is a myth. The matter is so complicated that the public does not understand it.
As my hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) said, the Government are cutting the percentage of central Government support to local

authorities. It is all very well saying, "So did you in 1978–79." I accept that. Government have the right to control the totality of public expenditure, but there is no doubt that the cuts in support for local authorities are now substantial. I am not trying to score a debating point, I am merely stating a fact. This has occurred at a time when the demands on local authorities are increasing.
It is all very well Conservative Members saying, "There are not so many kids now and the pupil-teacher ratio is better than it has ever been." There are, however, increasing demands on social work and housing expenditure. What about housing benefits and the confusion that exists in authorities that offer rent and rates rebates? Conservative Members do not begin to understand the problems facing ordinary people in deprived areas. The demands on local authority expenditure are now significant.

Mrs. Anna McCurley: Would it not be better if from time to time the local authorities stuck to their own last instead of taking on the mantle of central Government, as they have done recently? For example, there was the recent show trial over Trident by Strathclyde regional council. The Cremer and Warner report produced was a total waste of money, as was the public inquiry, which was simply used to score cheap political points.

Mr. Brown: The hon. Lady will have plenty of opportunity in the next few years to develop those arguments, but that is pure chickenfeed in terms of public and local authority expenditure.
I do not complain about who started this. It does not matter who made the first mistake or who was to blame. There are faults on both sides, and that should be recognised—[Interruption.] Will the hon. Lady concede that the Government have been wrong?

Mrs. McCurley: indicated dissent.

Mr. Brown: I do not want to sound like the hon. Lady's old man, because I am not—at least not that I know of. I would have much more respect for the hon. Lady if she was willing to admit that her party is wrong on occasion, just as I am willing to admit some of the faults and weaknesses on my side. In this climate there are faults on both sides. The Government have been vindictive to many Labour-controlled authorities; equally, some Labour-controlled authorities, because of their frustration, have tended to interfere in national matters such as nuclear-free zones. I plead with hon. Members on the Government side to understand that it is because they have not been able to provide services for the people who most need them that frustration has arisen.
I look forward to the so-called proposals to reform the rating and valuation system. If the Government's promise means anything, the rate burden will be relieved on football grounds, race courses and some other categories. I do not disagree with that, but when the Government relieve the rate burden on any category that burden is merely transferred to another category. Therefore, which category will suffer? Will it be the domestic ratepayer or will the Government compensate for the changes they are proposing?

Mr. Bill Walker: I know the hon. Gentleman is always just and fair on these matters. Would he agree that it could never be right that any part of Scotland should be rated in


a way that disadvantaged it compared with England, particularly when that part of Scotland is in competition with England? I have in mind caravan parks, hotels and so on. Would the hon. Gentleman accept that this anomaly must be removed?

Mr. Brown: I agree entirely. There is an element of basic justice that says that if a football ground is to be rated —I admit publicly to being an agnostic Celtic supporter —the burden should be broadly equal. I do not disagree with that. I am merely saying that when the changes are made which have the effect in Scotland of reducing the burden legitimately for some categories, the same amount of money will still have to be raised. Where will it come from? Will it come from the domestic ratepayers or from the friends of the Conservative party, the commercial ratepayers, or will it come from Government? I know that is not a matter for discussion tonight. I am merely using it as an example to show how complex the subject is.
Guidelines have been mentioned. I have great respect for the civil servants in St. Andrew's house but how do they know the needs of the Easterhouse housing scheme? They do not know. They do not even know where it is. There is almost a statutory bullfight between central Government and the local authority. That is not the way to do things. I regret that the Government have made life more difficult for local authorities. I understand the need to control public expenditure although I do not agree with it. I hope that my hon. Friends will vote against what is in effect a cut of £45 million to local authorities in Scotland.

Mr. Dennis Canavan: This order is yet another attack on local democracy perpetrated by the Government. We have already seen various forms of this attack since this rotten Tory Government got in way back in 1979. We have seen selective action being taken against certain local authorities. When the Secretary of State got the keys to St. Andrew's House he virtually locked the door on any form of local democracy in Scotland. He has taken selective powers against certain local authorities, including Stirling district. Indeed, he has a vested interest in Stirling as he is a ratepayer there.
The Minister said earlier that it was wrong for the democratically-elected local authority in Stirling to thwart the will of the centralist dictatorship in St. Andrew's house over the sale of council houses. How would the Secretary of State react if a future Government passed legislation forcing the sale of houses on the Younger family estate to sitting tenants? Would the Younger family react in a receptive and passive way, or in a militant way?

The Secretary of State for Scotland (Mr. George Younger): I am glad to respond to the hon. Gentleman's question. I may or may not like such legislation, but I would certainly obey the law of the land.

Mr. Canavan: When I become Secretary of State for Scotland I shall introduce legislation to force the sale to sitting tenants of houses on the Younger estate, and every other private sector estate in Scotland. I shall be grateful then for the support of the Secretary of State and his acceptance of the law of the land. I hope that he will not drag his feet and indulge in the sort of nonsense that we have seen from the landed gentry in the past.
What we have heard from the Government this evening has been a wholly unrepresentative view. The son of

Viscount Leckie, the son of the Marquess of Lothian and others represent only about 20 per cent. of the people of Scotland — yet they claim to speak on behalf of the people of Scotland. They have no mandate to influence —let alone direct—the level of rates in Scotland.
Before the recess certain selective measures were taken against Stirling, Kirkcaldy and Glasgow district councils and the Lothian regional council. Last year similar measures were taken against Stirling and Dundee district councils and Lothian regional council—[Interruption.] I am glad that Conservative Members are flooding into the Chamber—it is good to see hon. Members from south of the border taking an interest in Scottish local affairs.
There has been an attack on the levels of local democracy that existed in Scotland before the Tory Government took office. I do not claim that the levels of local democracy that prevailed in Scotland before 1979 were perfect. Many members of the Labour party were in favour of improving the standards, especially by devolving legislative powers to a directly elected Scottish Assembly. But there is now a move towards centralisation that is quite contrary to the interests of democratic representation in Scotland or anywhere else.
What we are seeing as a result of the 1983 general election is a move towards centralisation of decision making that would make even Stalin blush, but of which the Secretary of State for Scotland is proud. He is not Scotland's man. He is not elected by us. If I go to the constituency that I represent, or to those represented by my hon. Friends in Scotland, I am asked "Who is this character? Who elected him?" Yet, George Younger, Secretary of State for Scotland is there, acting in a jackboot manner and telling local authorities, most of whom have a better mandate than he, what to do. He is telling these people, the directly elected representatives at local level that he, not they, will determine the level of rates, that he, not they, will determine the level of local services.

Mr. Michael Forsyth: rose—

Mr. Canavan: I shall give way to the hon. Gentleman, who represents a gerrymandered part of Stirling district council.

Mr. Forsyth: If, as he claims, the hon. Gentleman speaks for Stirling district council, why was he in such a hurry to leave his constituency and find pastures new?

Mr. Canavan: The reason why I am no longer Member of Parliament for part of the hon. Gentleman's constituency is, first, that the Boundary Commission carved up my constituency into seven different bits—the only constituency in Britain that suffered such butchery. The Secretary of State appointed a Tory sheriff, a former chairman of the Conservative party in central Scotland, to conduct the local inquiry. If he had not, the hon. Member for Stirling (Mr. Forsyth) would not be here.
The second reason why I am here representing Falkirk, West is that the people there elected me, and the constituency Labour party of Falkirk, West selected me. It includes substantial parts of my former constituency. I loathe gerrymandering, and it is a disgrace that the hon. Member for Stirling should come in on my speech on this matter. He must have a very guilty conscience in classifying me as my own Member of Parliament. I used to by my own Member of Parliament, but now I am not.
It is the first time that the area in which I live has had a Tory Member of Parliament, and the first time for half a century or more that the people of Bannockburn have been represented by a Tory. Many other places in the Stirling constituency can likewise lament that they have a carpetbagger who came up from the City of London. That is what he represented before and he still represents the financial interests of the City of London. However, he goes to Stirling and pretends that he represents our interests there.

Mr. Deputy Speaker (Mr. Harold Walker): Order. All this is very entertaining, but it is not not about local government in Scotland. I remind hon. Gentlemen that they must speak on the order before the House.

Mr. Canavan: rose—

Mr. Richard Hickmet: rose—

Mr. Canavan: I have just given way to the Deputy Speaker. In another two minutes I may give way to the hon. Gentleman.
I come back to local government. The hon. Member who claims to be the Member for Stirling used to be a councillor here in Westminster, and I understand that he was well versed in local government affairs here in Westminster. I understand, too, that he is even more experienced in dealing with people who are trying to privatise local government and get rid of it altogether. [HON. MEMBERS: "Hear, hear."] That is what it is all about. Conservative Members are saying "Hear, hear." The Tories want to get rid of local government. They want a centralised bureaucratic administration down here in Westminster. They want to treat Scotland and other areas such as Merseyside, the north of England and Wales as colonies. They will not get away with it.

Mr. Hickmet: I am constrained to rise because the hon. Member for Falkirk, West (Mr. Canavan) has addressed himself to me for some 15 minutes. Will the hon. Gentleman accept from me, as one who represents a constituency in south Humberside, that many people in this Chamber feel that both the Scottish and Welsh Members of Parliament have a very fair crack of the whip. Indeed, we debate their issues ad nauseam. Will he accept from me that he has a very fair crack of the whip?

Mr. Deputy Speaker: Order. The House is debating the Rate Support Grant (Scotland) Order. It would help if hon. Members were to stick to that.

Mr. Canavan: I entirely agree with your ruling, Mr. Deputy Speaker. It is good to know that someone can bring some of these Tories into order. Once we get our own Parliament in Scotland—I hope that the hon. Member votes for it—it may alleviate some of the pressure on this legislative Chamber.

Mr. Hickmet: If I had a guarantee that it would mean that the hon. Gentleman would not bore this House with an interminable speech, I might well be constrained so to do.

Mr. Canavan: I am glad to hear that. I only wish that we had had the same support in the lifetime of the previous Labour Government when we were trying to get a Scottish Parliament off the ground. I am glad to know that some

of the new young Tory dynamic Members of Parliament are now supporting home rule and local democracy for Scotland. If for no other reason, they can go back to their kips at an earlier hour in this place, and we can get on with our business in Scotland. I only wish that the Secretary of State for Scotland and his minions would realise that, too.
I come back to the order. Before I was distracted by some of the Tory Members, I was talking about the selective action that was taken against Scottish local authorities just before the recess. You may remember, Mr. Deputy Speaker, that you were in the Chair when the selective action was taken. In this order we have an attack on local government in Scotland in general. Parliament should take serious cognisance of that, if we pay anything more than lip service to local democracy. It is surely the essence of local democracy that locally elected people should have the power not just to determine the level of services locally but to determine the level of local revenue-raising powers. Unfortunately, this Government contravened this principle.
It has always been generally accepted, I think, by COSLA and people of various political complexions in local government — whether they entirely agree with local government legislation or not — that local government legislation is a legislative framework—this Government have made it a straitjacket—within which local councillors must operate. In other words, from that point of view it could be argued that local government is the child of central government.
However, according to our democratic traditions, we should surely be trying to give the fullest effect to the will of the people. But doing that surely does not mean that Conservative Members who do not have a mandate from one of the nations that makes up the United Kingdom can force through legislation on the rate support grant, and on levels of local services and so on in that country. As the majority party in Scotland—the Labour party—surely we have the right to say that enough is enough. We shall therefore fight tooth and nail. Many of our people in local government — whether in Stirling, Falkirk, Dundee, Glasgow, Edinburgh or anywhere else—have a better mandate to represent their people than the Secretary of State for Scotland, whose party was rejected by more than 70 per cent. of the people of Scotland at the recent general election.
The Secretary of State is not quite of jackboot standard, but he is trying to use his wellie boot to impose his will on elected councillors and on the people of Scotland. Whatever reasons he may rightly or wrongly have had for imposing selective measures on various councils in July before the recess, there can be no justification for using a blanket measure now against Scottish local authorities in general. Yet that is what the order does.
The Secretary of State seems to offer us blind monetarist judgments. However, they are probably not his; he just accepts them from the Prime Minister and the Treasury. He is just the hatchet man or the puppet whom the Prime Minister uses to impose Tory rule in Scotland. He is like an unelected governor-general, who is kicking the people of Scotland and treating them as if their country were a colony. The people of Scotland can stand for only so much — [Interruption.] Hon. Members may well laugh. I welcome the interest shown at this time of night by Conservative Members who represent English constituencies. The attack that the Secretary of State is perpetrating on local democracy in our homeland may well


be perpetrated on the homeland of the south of England in a few months time, let alone a few years time. We in Scotland are being used as guinea pigs to test the legislation that the Secretary of State for the Environment has in store, so that he can mount a further attack on local democracy in the English home counties. I think that they are called the shire counties, and they are represented by some of the Tory Members now in the Chamber.

Mr. Eddie Loyden: My hon. Friend has made some very proper points about local democracy. However, I should like to draw his attention to a statement that appeared in the Financial Times last week. It said that it was the Secretary of State's intention to send a commissioner to Liverpool, because the Labour-controlled city council was carrying out the manifesto on which it was elected.

Mr. Canavan: rose—

Mr. Deputy, Speaker: Order. Liverpool is not in Scotland. I very much hope that we will stay with the Rate Support Grant (Scotland) Order.

Mr. Canavan: There used to be a constituency in Liverpool called Scotland Exchange. My hon. Friend the Member for Liverpool, Garston (Mr. Loyden) has made a fair point. With the Government sending in a commissioner to Liverpool and planning to disestablish completely the Greater London council and certain other local authorities in England, I wonder whether the Secretary of State for Scotland will acquiesce in legislation to abolish Scotland, never mind local authorities in Scotland.

Mr. Foulkes: Do not give him ideas.

Mr. Canavan: We are seeing an increasing centralisation of power with decisions being taken in Whitehall, in St. Andrew's House or in various Government Departments. Parliament is very often unable to debate and vote on these measures, yet they are being steamrollered through without parliamentary accountability.
Anyone who believes in democracy, whether he is from Scotland, England or Wales—[HON. MEMBERS: "What about Ireland?"] I have never believed that Ireland should be represented in this place, but that is another matter. I do not wish to be sidetracked because I am sure that Mr. Deputy Speaker would call me to order over the railroading of Ireland into this debate. I must get back to Scotland.
The order is about rates. I could get unanimous support from all 650 hon. Members by saying that no one loves an increase in rates. It is an unpopular tax [HON. MEMBERS: "Hear, hear"]. I am glad to hear that. Scottish Members were probably even more positive than Opposition Members in lobbying for the abolition or the reform of rates. It is a pity that the Government at the time of the recent general election and, indeed, at the time of the 1979 general election built up great expectations about the abolition of rates or the radical reform of the rating system. The Prime Minister gave a specific promise, one of many broken promises on this issue. The promise has been broken all the way along the line. The Government have now fallen into the trap of accepting the advice of the Treasury and other Government Departments that any reform of the rates system or its replacement is out of the question. I am willing to give way to any Conservative
Member who is willing to stand up on behalf of his or her constituents and tell me that I am right on that matter. I know that I am. Conservative Members are putting their beds before the interests of their constituents. They want to go home and they are not even interested.
According to the rules of the House this debate will finish at 11.30 pm. Therefore we have time for contributions from Members representing English constituencies about the radical reform of rates which was promised by the Tory Government in 1979.
Nobody likes rate increases. It is a most unpopular form of revenue raising, but to eliminate local revenue raising powers completely would be a serious mistake on the part of the Government, whatever their political complexion, because it would interfere in the balance of power between central and local Government, which has been inherent in whatever standards of local democracy we have had for a century or more.
I hope that Conservative Members who want to abolish rates will come up with a constructive alternative. I have proposed a local income tax, and there might even be a case for a local wealth tax, or some devolved form of that tax. When rates were first introduced, a person's wealth could be measured by the extent of his property on the basis of the rateable value of that property. But that is no longer the case because through rate and tax dodging exercises too many people have taken advantage of loopholes in legislation and today it is clear that the rating system is not a fair system of revenue raising.

Mr. Bill Walker: Is the hon. Gentleman's idea of a wealth tax that people earning, say, £15,000 a year and living in council houses should be subject to a wealth tax?

Mr. Canavan: In case the hon. Gentleman is referring to the fact that I was born and brought up in a council house and still live in one — [HON. MEMBERS: "Shame."] Some of his so-called comrades shout "Shame", but I should get more state subsidy if I took out a £25,000 mortgage on a house than I am receiving by paying an economic rent for my house to Stirling district council. There is no danger of an application going in from me to buy my, or my wife's, council house. There is no chance of my application going in, let alone being held up.

Mr. Hickmet: Would the hon. Gentleman care to take the example of a local Labour councillor in my constituency who, although he has objected to the policy of council house sales, has seen fit to buy his council house at a substantial discount? I urge the hon. Gentleman to pursue policies—

Mr. Deputy Speaker: Order. I hope that the hon. Member for Glanford and Scunthorpe (Mr. Hickmet) will not urge the hon. Member for Falkirk, West (Mr Canavan) to stray further from the subject before the House, which is confined to Scotland and does not refer to Scunthorpe or South Humberside.

Mr. Canavan: I am grateful to you, Mr. Deputy Speaker, for drawing this unruly House to order during what are irrelevant interruptions.
I repeat, if I took out a £25,000 mortgage I would gel more state subsidy than I get by continuing to live in my council house, where I have lived happily for many years.
We are debating rates increases, and the Tory Government try to blame local authorities for the increases


when it has been proved conclusively by the Convention of Scottish Local Authorities that the biggest factor behind them has been the serious reduction in rate support grant since the Tories took office in 1979.
Rates increases are a disbenefit to domestic ratepayers and industrial ratepayers, but those people should not point the finger at local authorities. The finger should be pointed at Tory Ministers, who by a series of measures since 1979 have been responsible for a savage reduction in RSG that has led to a serious inflation of rates for local authorities. This has had a detrimental effect on the living standards of council house tenants and private sector tenants. I have never had anything against those who want to buy a house or to rent in the private sector. We should encourage the maximisation of choice and individuals should be able to decide whether they want to live in rented accommodation or buy their own properties.
We are now seeing an attack on the living standards of those in the public sector and the private sector by a wicked Tory Government who have been responsible for a savage reduction in RSG for Scottish local authorities and for many of the shire counties in England, which are now represented by potentially rebellious Tory Members.
We want local democracy in Scotland to be restored at least to the status quo of 1979, but, more important, we want an improvement in that standard.
The Under-Secretary of State mentioned industry, but he has done nothing for it save to destroy the few remnants. He talks about the destructive element of rates and their influence on industrial development in Scotland, especially if local authorities increase them, but authorities are obliged to increase them to certain levels only because the Government have cut RSG so savagely. I remind the hon. Gentleman, the Earl of Ancram, who is a self-styled expert on local government, having come from the aristocracy of Scotland and having ruled Scotland for many years by hereditary claims and patronage, that he does not have the electoral mandate of the people of Scotland. However, he is now trying to destroy the remnants of Scottish local democracy.
Very little Scottish industry is left. According to a Minister, not long ago, in Britain as a whole—I have no reason to believe that the Scottish figures are different —rates for manufacturing industry were less than I per cent. of costs. How on earth can any Tory, Liberal or Social Democratic party Member argue that that has a crippling effect on industry in Scotland or elsewhere? I could argue in the opposite way, that the Tory Government by their rating legislation—never mind their lack of constructive industrial intervention—have been responsible for crippling industry in many areas, including mine.
Early last year, the Tory Government introduced legislation for the derating of external plant and machinery. This meant a massive rate rebate to multinational companies, such as BP and Imperial Chemical Industries in Grangemouth. Those companies might have benefited, but there has been a negative effect on the whole of the Falkirk district, which is the birthplace of the Scottish industrial revolution.
As a result of that and many other anti-industrial measures by the Government, we have seen a decline in industry and established companies, such as Carrs, go into receivership. This company is to a small extent rising from the ashes. Smith and Wells in Bonnybridge has gone into

receivership, and has not yet risen from the ashes. Perhaps the hon. Member for Eastwood (Mr. Stewart), who is the Minister responsible for industry at the Scottish Office, will enlighten us at a later date about this decline. I shall not stand for the de-industrialisation of my constituency.
Government Ministers have refused to intervene in a serious situation. A company which at one time employed almost 2,000 people has gone into receivership. A few years ago, the Government were partly responsible for a partial rescue operation involving bankers' interests in Scotland. Some of us believed that this project would not be viable unless we had some public as well as local community investment. I hope that the hon. Member for Eastwood, who is a Minister, will put his civil servants on to this matter at an early stage, start discussions about the possibility of a viable rescue operation and give every possible Government support. It seems that the Government will not intervene because of doctrinaire reasons.
Monetarism might work in the south of England, but it does not work or appeal to the people of Bonnybridge. I plead with the Minister to allow Government intervention and to give every possible support to the Falkirk district council and the Central regional council. Rather than allowing multinational interests to take over the Scottish economy, the way to regenerate and to democratise the Scottish economy is to make it a community, and to have Government ownership, if not in whole, at least in part.
What about services? The order is relevant to the standard of local services. Next May people will be electing district councillors and will expect them to have the power to deliver the goods—housing, planning and all other local government services.
In the 1980 district elections and the 1982 regional elections, even the former Solicitor-General for Scotland, the hon. and learned Member for Perth and Kinross (Mr. Fairbairn), who is busy trying to chat to the Minister, will have to admit that we received more support than the Tories. We received greater support and a wider mandate than the Tory party has ever received at any election.

Mr. Deputy Speaker: Order. Doubtless the election results in Scotland are of interest to many hon. Members, but they are not within the scope of the order. I must beg the hon. Member to deal with the substance of the order.

Mr. Canavan: I am grateful, Mr. Deputy Speaker. I was trying to relate the election results to the fact that this order is an infringement of the rights of local councillors who were elected in 1980 and 1982. I should like to be allowed to develop this argument a little. The councillors were elected on a manifesto which promised improvements in services. Many councillors feel constrained by this and previous orders which have been laid by this rotten Tory Government which, Mr. Deputy Speaker, you voted against as frequently as I did. I have no doubt that you still feel a certain sympathy for us.
We have been talking about the balance of power between central and local government. We now have an undemocratically elected Scottish Office which forces its will upon the Scottish people. The only protection that they have are the local councillors.
This order is yet another edict from the Scottish Office to the Scottish people. It dictates to them and tells them what is good for them. In the local elections in 1980 and 1982 the Scottish people had the opportunity to decide for


themselves what was good for them locally. The order will result in a serious threat to education, housing, social services for the elderly, the sick and the disabled and every other local government service that one can think of.
I do not know whether this order resulted from the same philosophy as that contained in the White Paper about local government and rating in Scotland which admitted that the Government had failed to find an alternative to the rating system and which was a gross disappointment to many of their friends. Many of them admitted that the rating system was very unfair. They thought that there should be a better system, an alternative to rates.
I mentioned the possiblity of local income tax. In their White Paper, the Government failed to answer the suggestion about local income tax. To this day, I cannot understand it, as we are now in a computer age. The tax system is now centralised at East Kilbride. The standard of computerisation is such that it could cope with different levels of local taxation in Scotland, whether it is income tax, sales tax, VAT, liquor tax, wealth tax, poverty tax, oil and gas revenue tax or any other tax.
Surely the computerisation of tax revenue raising at administrative level—I speak as one who tried a decade ago to introduce computerisation at secondary school level — has reached such a sophisticated level that we are capable of developing a system that can get rid of the Treasury centralist control. The people in Whitehall tell us that it is impossible. Weak-kneed Ministers have no mathematical competence. They just say that the Treasury bureaucrats tell them that it cannot be done and, it is administratively impossible, so they must accept their word. Many hon. Members believe that local revenue raising powers other than for rates are a distinct, feasible possibility. If the political will were there, the proposal would be implemented this Session.
The White Paper is related to the order. In it there is a proposition further to interfere with local democracy. English comrades on both sides of the House will be interested to hear this. I am glad that the Leader of the House is here. We have been used as guinea pigs for many things. The Government think that we are the mugs who should first be subjected to change and then they try it on the people in England and Wales. We are not mugs in Scotland. We shall fight the Government's attitude at every opportunity.
In their White Paper the Government proposed that henceforth the level of rate fund contribution to the housing revenue account of Scottish local authorities would virtually be determined by the Government. What sort of local democracy is that? What have they reduced themselves to now? The Government are now dictating the level of rate fund contribution to the housing revenue account.
The Tory Government are now trying not only further to weaken local democracy but to push up council house rents. Since the Government were elected, the council house rents in Scotland have increased by more than 100 per cent. I do not know the figure for England and Wales. The Government constantly refer to inflation and living standards. They have been guilty of a savage increase in council house rents, which has pushed up inflation as more than 50 per cent. of Scottish people live in rented, mainly council, accommodation.

Mr. John Carlisle: They are subsidised.

Mr. Canavan: The hon. Gentleman says that they are subsidised, but who is not subsidised? Every industry in the country is subsidised. Practically all householders in the country are subsidised, be they in the private or the public sector. Every farmer is subsidised. The hon. Member for Luton, North (Mr. Carlisle) is subsidised because he is paid from public funds. If the definition of "subsidy" is money coming from public funds, who in the House or anywhere else can truthfully say that he or she is not subsidised? Of course we are subsidised. We believe in the public sector and in its use to subsidised housing, education, the National Health Service, the growth of industries and all the facilities worthy of subsidisation. I am all for subsidies. "Subsidy" should not be a dirty but a good word. A better phrase might be "public investment in our future", be it through central or local government, or both.
Since the Conservative Government came to office, Falkirk district council, which I represent, has suffered a succession of attacks on manpower levels and in the rate support grant. The housing support grant and the housing capital allocation have been cut so that the authority receives virtually nothing for housing except what it receives from the sale of council houses.
When those cuts were referred to earlier, the hon. Member for Stirling said that Stirling district council was guilty of excessive delay and dragging its feet in dealing with council house sales, but when I referred a short time later to the Scottish Law Commission dragging its feet for 12 years or more on warrant sales, the Solicitor-General for Scotland tried to defend that. Apparently it is all right for people to drag their feet when dealing with warrant sales, so the hon. Member for Stirling is two-faced when he says that delay in the sale of council houses is not permissible.

Mr. Deputy Speaker: Order. I must tell the hon. Member for Falkirk, West that it is not acceptable to refer to an hon. Gentleman as being two-faced.

Mr. Canavan: I have got away with it many times before.

Mr. Deputy Speaker: Irrespective of what the hon. Member may have got away with—doubtless he has got away with many things in the past—I hope that he will on this occasion, at my request withdraw the remark.

Mr. Canavan: As it is you who makes the request. Mr. Deputy Speaker, I will rephrase my comment. Janus was a god-like figure in Greek mythology who had two faces, one facing one way and ore facing the other. The hon. Member for Stirling, who is my Member of Parliament, has some similarities to Janus.
The hon. Gentleman also tried to send out bribery-type letters during the general election campaign to scarify people who had bought or were buying their council houses out of voting for Labour and into voting for him when he came up carpetbagging from London. So my Member of Parliament has a vested interest in trying to encourage the sale of council houses because he thinks that it may help to buy him a few votes. I have no such interest. I live in a council house and I have no intention of buying it, selling it or anything else.

Mr. Robert Atkins: The hon. Gentleman, with his income, should be ashamed of that.

Mr. Canavan: I remind the hon. Member that I should get more state subsidy even from the Tory Government if I took out a £25,000 mortgage than if I continue to pay an economic rent for the council house in which I live now and in which I lived for many years before I became a Member of Parliament.
The order is yet another deliberate attempt by the Government to cut the living standards of working people and their families and to try to put councillors in the front line. They imagine that local councillors are more unpopular locally than the people hiding in St. Andrew's house and so this cut in rate support grant is a better instrument to wound the interests of the people whom we represent.
In the long run, however, people outside will not be fooled. They will realise that this is yet another infringement of the freedom not just of councillors but, more importantly, of the people whom the councillors have been elected to represent. That applies whether it is a cut in real living standards through an increase in council house rents, which will almost inevitably result from the order, or a cut in the social wage, which will hurt some of the most deserving recipients of local government services — the children in our schools, the younger children in nursery education, the school leavers who look to the local authority for the support that the Tory Government will not give them for higher and further education or training in industry and commerce.
One of the most disgusting aspects of the Government's dogmatic monetarism has been their distinction between the private sector people whom they claim are wealth creators and the people whom they describe as wealth consumers—the disabled, the children in our schools, the mentally handicapped in hospitals and local government homes. Is that what they are reduced to? If so, the Government do not believe in making a worthwhile contribution to the betterment of society.
To say that the private sector is wealth-creating and that the public sector is wealth consuming is a gross misunderstanding of the present mix of our mixed economy. Many people in the public sector are creating wealth, while many in the private sector are stealing it and doing nothing whatever to create a better society. One of the best ways of creating a fairer opportunity in education, health and social services for the elderly, sick and the disabled, is by getting central Government off the back of local government.
We must return to the standard of local democracy that existed in 1979 and build upon it. We must give the people what they voted for — freedom for their elected representatives—[Interruption.] The people of Scotland did not vote for that lot on the Conservative Benches—[HON MEMBERS: "They did not vote for your lot either".] They did. Under the British first-past-the-post system of parliamentary representation, we have more seats in Scotland than all the other parties put together. Therefore, we have a better mandate to represent the people of Scotland and their interests.
In many instances, those in local government have a better mandate than Labour and Tory parliamentarians. We shall fight to maintain and implement that mandate. This rotten tory Government have no mandate and are now hell-bent on using £10,000 million plus of public money to thrust on the people of Scotland the Trident nuclear

weapon, which they do not want. We shall fight against that with every legitimate weapon at our disposal. We do not want £10,000 million spent on mass destruction——

Mr. Deputy Speaker: The hon. Gentleman knows only too well that that does not come within the scope of the order, and the House would be grateful if he now returned to the subject under discussion.

Mr. Canavan: I am sorry that the Minister and his impotent friends, including the Secretary of State for Scotland, did not have the guts to tell the Cabinet, "The people of Scotland do not want £10,000 million spent on Trident. They want it spent on local government and local democracy for the betterment of democracy and local services."

Mr. Ancram: As I was about to say an hour ago, before something intervened, this has been a wide-ranging and interesting debate. I hope that the House will forgive me if I am relatively brief, but we have had a lengthy debate and much ground has been covered.
The most relevant point was made by the hon. Member for Glasgow, Provan (Mr. Brown), who, if I recorded his remarks correctly, said that Governments had a right to control the totality of public expenditure. In a sense this order, and what we are trying to do to local government finance in Scotland, has come within that concept.
Conversely, it was interesting to hear the views of the hon. Member for Gordon (Mr. Bruce), who seemed to feel that any attempt by central Government to affect the financing of local government destroyed local government. If we consider those two views at both ends of the debate it becomes obvious that the hon. Member for Provan, who had responsibility in Government himself and knows that Governments are elected to pursue an economic strategy and have a right to see that that strategy is not undermined by local authorities, gave the correct view. He and I will probably disagree this year and perhaps in years to come about the level of the reductions. He referred to them as substantial. I will return to that in my closing remarks. But I was pleased to understand from him at least that on the Opposition side of the House there is an appreciation that Government have a responsibility to ensure on the public's behalf that the overall limits of public expenditure are kept within bounds.
I hope the hon. Member for Glasgow, Garscadden (Mr. Dewar) will forgive me if I do not answer all the points he raised. Inevitably he referred to the higher cut in grant in 1983–84 compared with 1982–83. He must understand —he obviously did not understand it from the remarks I made at the beginning — that the purpose of an abatement of this sort is to say to local authorities that we believe that their expenditure is still too high in real terms and we want to see reductions.
Last year my right hon. Friend the Secretary of State put a fairly lenient abatement against local authority spending in Scotland. He asked local authorities to bring down their levels of expenditure in real terms in the current year. But that message was not accepted by local authorities. I repeat what I said when I opened. The figure of £45 million set by the Secretary of State is not an exact proportion of the level of overspend; it is the level of abatement that my right hon. Friend the Secretary of State


believes might at last get through to local authorities the message that we mean what we say about their spending patterns.
The hon. Gentleman also said that it is unfair to base the abatement on the budget of individual councils. He may be surprised to learn that I agree with him. That is why we adjust the abatement when the actual expenditure figure becomes available. He will understand that outturn figures of expenditure are not available during a financial year and are often not available for some months after the end of the financial year. If the abatement is to be made in terms of current expenditure, it has to be made provisionally, at least to begin with, on the basis of the budget.
The hon. Member for East Lothian (Mr. Home Robertson) spoke about over-budgeting and about authorities budgeting to meet the abatement. He spoke about it as though this was something on which they should be complimented.

Mr. Home Robertson: It is inevitable.

Mr. Ancram: As the hon. Member says, it is inevitable. I should like to point out to him a simple fact of life. The Secretary of State looks at the overall level of overspending in terms of budgets before deciding on the level of the general abatement. If a large proportion of the overspend has been created because councils have been budgeting up to meet the abatement, they are in effect signing their own death warrants. By budgeting up in that way they are ensuring that there will be a general abatement. The higher the allowance they make for it, the higher the abatement is likely to be. That is a course of madness. If one message can get across from this debate to local authorities in Scotland, it should be that that is the one way to ensure year after year that there is a general abatement. I hope that they will understand that when they come to deal with their budgets for next year.
I shall deal briefly with the speeches by my hon. and learned Friend the Member for Perth and Kinross (Mr. Fairbairn) and my hon. Friend the Member for Tayside, North (Mr. Walker). Both of them made much the same point. I appreciate that they represent an area where the district council has, by and large, made great efforts to act prudently and follow the requirements and requests of the Government.
I am prepared to admit that the system by which abatement is drawn from councils is, to say the least, rought justice. It depends on the basis of distribution rather than the level of overspend against guidelines. Although I understand my hon. Friend's disappointment, I fail to understand how he and my hon. and learned Friend the Member for Perth and Kinross linked that fact with the order. In introducing the order I explained that that was the only way in which abatement could presently be drawn from councils. But we shall legislate next year to ensure that abatement will fall on councils in proportion to their expenditure over guidelines.

Mr. Bill Walker: I trust that my hon. Friend understands that the debate provided an opportunity to express the views and concerns of myself, my hon. and learned Friend the Member for Perth and Kinross (Mr. Fairbairn) and the councils that we represent. We took that opportunity.

Mr. Ancram: I listened carefully to what my hon. Friend had to say. I am fully aware that a number of councils

have been concerned about guideline methodology in earlier years. We shall have regard to some of the comments when considering the guidelines for 1984–85.
The basic attack against the order has been an argument put forward so often in such cases — that the Government are slashing the expenditure of local authorities in Scotland. To listen to Opposition Members, one would think that over and over again, year after year, we have slashed the level of expenditure. Yet in 1981–82, at November 1982 prices, the actual expenditure of local authorities was £2,591 million. In 1982–83 the provisional figure was £2,608 million. This year, on the budgets with which we are dealing in the order, the figure is £2,661 million—all at constant prices. That is not a sign of budgets and expenditure being slashed; it a sign of expenditure rising in real terms.
I said earlier that in future we hope to deal with local authorities and controlling expenditure by co-operation. Local authorities must accept the realities, as we must. I hope that the lessons of the order will be learnt and that we will not have to return with a similar order next year. We need the order this year, and I call upon my hon. Friends to support it.

Mr. Home Robertson: rose—

Mr. Deputy Speaker: Order. The hon. Gentleman has already spoken.

Question put:—

The House divided: Ayes 184, Noes 80.

Division No. 60]
[11.19 pm


AYES


Aitken, Jonathan
Colvin, Michael


Amess, David
Conway, Derek


Ancram, Michael
Coombs, Simon


Arnold, Tom
Cope, John


Ashby, David
Couchman, James


Aspinwall, Jack
Cranborne, Viscount


Atkins, Rt Hon Sir H.
Currie, Mrs Edwina


Atkins, Robert (South Ribble)
Dickens, Geoffrey


Baker, Nicholas (N Dorset)
Dicks, T.


Batiste, Spencer
Dorrell, Stephen


Beaumont-Dark, Anthony
Douglas-Hamilton, Lord J.


Bellingham, Henry
Dover, Denshore


Benyon, William
Dunn, Robert


Berry, Sir Anthony
Dykes, Hugh


Biffen, Rt Hon John
Evennett, David


Biggs-Davison, Sir John
Eyre, Reginald


Blaker, Rt Hon Sir Peter
Fallon, Michael


Body, Richard
Favell, Anthony


Boscawen, Hon Robert
Fookes, Miss Janet


Bottomley, Peter
Forsyth, Michael (Stirling)


Bowden, A. (Brighton K'to'n)
Forth, Eric


Bowden, Gerald (Dulwich)
Fox, Marcus


Brandon-Bravo, Martin
Franks, Cecil


Bright, Graham
Fraser, Peter (Angus East)


Brinton, Tim
Freeman, Roger


Brooke, Hon Peter
Gale, Roger


Brown, M. (Brigg &amp; Cl'thpes)
Galley, Roy


Bruinvels, Peter
Gardiner, George (Reigate)


Buck, Sir Antony
Goodhart, Sir Philip


Budgen, Nick
Gregory, Conal


Bulmer, Esmond
Griffiths, Peter (Portsm'th N)


Burt, Alistair
Ground, Patrick


Butterfill, John
Hamilton, Neil (Tatton)


Carlisle, John (N Luton)
Hampson, Dr Keith


Carttiss, Michael
Hanley, Jeremy


Channon, Rt Hon Paul
Hannam, John


Chapman, Sydney
Hargreaves, Kenneth


Chope, Christopher
Harris, David


Churchill, W. S.
Harvey, Robert


Clark, Dr Michael (Rochford)
Hawkins, Sir Paul (SW N'folk)


Clarke Kenneth (Rushcliffe)
Hawksley, Warren






Hayes, J.
Mills, Iain (Meriden)


Hayhoe, Barney
Moate, Roger


Hayward, Robert
Moore, John


Heathcoat-Amory, David
Morris, M. (N'hampton, S)


Heddle, John
Morrison, Hon P. (Chester)


Henderson, Barry
Moynihan, Hon C.


Hickmet, Richard
Neale, Gerrard


Hind, Kenneth
Needham, Richard


Hirst, Michael
Neubert, Michael


Hogg, Hon Douglas (Gr'th'm)
Newton, Tony


Holland, Sir Philip (Gedling)
Nicholls, Patrick


Holt, Richard
Norris, Steven


Hooson, Tom
Onslow, Cranley


Howarth, Gerald (Cannock)
Oppenheim, Philip


Howell, Ralph (N Norfolk)
Ottaway, Richard


Hunt, David (Wirral)
Page, Richard (Herts SW)


Hunter, Andrew
Peacock, Mrs Elizabeth


Jessel, Toby
Pollock, Alexander


Johnson-Smith, Sir Geoffrey
Powell, William (Corby)


Jones, Gwilym (Cardiff N)
Powley, John


Jones, Robert (W Herts)
Prentice, Rt Hon Reg


Kershaw, Sir Anthony
Proctor, K. Harvey


Key, Robert
Raffan, Keith


King, Roger (B'ham N'field)
Renton, Tim


King, Rt Hon Tom
Rhodes James, Robert


Knight, Gregory (Derby N)
Ridsdale, Sir Julian


Knight, Mrs Jill (Edgbaston)
Sackville, Hon Thomas


Knowles, Michael
Sainsbury, Hon Timothy


Lang, Ian
Shaw, Sir Michael (Scarb')


Lawler, Geoffrey
Shelton, William (Streatham)


Lee, John (Pendle)
Speed, Keith


Leigh, Edward (Gainsbor'gh)
Spencer, D.


Lilley, Peter
Spicer, Jim (W Dorset)


Lord, Michael
Spicer, Michael (S Worcs)


McCurley, Mrs Anna
Stern, Michael


Macfarlane, Neil
Stevens, Lewis (Nuneaton)


MacKay, John (Argyll &amp; Bute)
Stevens, Martin (Fulham)


Maclean, David John.
Stewart, Allan (Eastwood)


Major, John
Stewart, Andrew (Sherwood)


Malins, Humfrey
Thompson, Donald (Calder V)


Malone, Gerald
Thurnham, Peter


Maples, John
Townend, John (Bridlington)


Marlow, Antony
Tracey, Richard


Marshall, Michael (Arundel)
Viggers, Peter


Mather, Carol
Wakeham, Rt Hon John


Maude, Francis
Walden, George


Mawhinney, Dr Brian
Warren, Kenneth


Maxwell-Hyslop, Robin
Watts, John


Mayhew, Sir Patrick
Wheeler, John


Mellor, David



Merchant, Piers
Tellers for the Ayes:


Meyer, Sir Anthony
Mr. Tristan Garel-Jones and Mr. Archie Hamilton.


Miller, Hal (B'grove)






NOES


Alton, David
Kennedy, Charles


Ashdown, Paddy
Lewis, Ron (Carlisle)


Barron, Kevin
Lewis, Terence (Worsley)


Beckett, Mrs Margaret
Lloyd, Tony (Stratford)


Beith, A. J.
Loyden, Edward


Bennett, A. (Dent'n &amp; Red'sh)
McCartney, Hugh


Blair, Anthony
McDonald, Dr Oonagh


Boyes, Roland
McGuire, Michael


Bray, Dr Jeremy
McKay, Allen (Penistone)


Brown, Gordon (D'f'mline E)
McKelvey, William


Brown, Hugh D. (Provan)
Mackenzie, Rt Hon Gregor


Brown, Ron (E'burgh, Leith)
Maclennan, Robert


Bruce, Malcolm
McTaggart, Robert


Callaghan, Jim (Heyw'd &amp; M)
McWilliam, John


Canavan, Dennis
Madden, Max


Carlile, Alexander (Montg'y)
Marek, Dr John


Cocks, Rt Hon M. (Bristol S.)
Marshall, David (Shettleston)


Cook, Frank (Stockton North)
Meadowcroft, Michael


Cook, Robin F. (Livingston)
Millan, Rt Hon Bruce


Cowans, Harry
Miller, Dr M. S. (E Kilbride)


Craigen, J. M.
Nellist, David


Davies, Ronald (Caerphilly)
O'Neill, Martin


Davis, Terry (B'ham, H'ge H'l)
Parry, Robert


Dewar, Donald
Patchett, Terry


Dixon, Donald
Pike, Peter


Dormand, Jack
Powell, Raymond (Ogmore)


Eadie, Alex
Redmond, M.


Eastham, Ken
Robinson, G. (Coventry NW)


Ewing, Harry
Ross, Ernest (Dundee W)


Fatchett, Derek
Skinner, Dennis


Fields, T. (L'pool Broad Gn)
Snape, Peter


Fisher, Mark
Steel, Rt Hon David


Foulkes, George
Stewart, Rt Hon D. (W Isles)


George, Bruce
Strang, Gavin


Gilbert, Rt Hon Dr John
Torney, Tom


Hamilton, James (M'well N)
Wallace, James


Harman, Ms Harriet
Wareing, Robert


Harrison, Rt Hon Walter
Welsh, Michael


Home Robertson, John



Hughes, Robert (Aberdeen N)
Tellers for the Noes:


Hughes, Sean (Knowsley S)
Mr. Frank Haynes and Mr. Norman Hogg.


Hughes, Simon (Southwark)

Question accordingly agreed to.

Resolved,
That the Rate Support Grant (Scotland) Order 1983, a copy of which was laid before this House on 29th July, be approved.

Orders of the Day — Southampton Eye Hospital

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Mather.]

Sir David Price: I am very grateful for this opportunity of raising the subject of the future of the Southampton eye hospital. I know that all my hon. Friends whose constituencies are served by that admirable hospital would wish to join me in expressing their praise and thanks to the very competent doctors and dedicated staff who practise such excellent medicine in a hospital which, we must face it, is crumbling. I also know that my hon. Friend the Member for Southampton, Itchen (Mr. Chope) wants to say a few brief words in support of my submission. The hospital is physically in his constituency, but as the senior Member of Parliament for the area I have had a rather longer association with it than he has.
My submission is simple. The Southampton eye hospital urgently needs to be relocated in a new building on a new site while at the same time retaining its independence. I shall give just two of the reasons why my submission is eminently reasonable. The Southampton eye hospital is responsible for providing the whole range of ophthalmic care, with all the latest techniques, for the Southampton and south-west Hampshire health district. We are not complaining that the current crummy Victorian building has not been equipped with lasers and so on, because it has been; it has the full range of modern diagnostic facilities. However, there is a point that is not fully appreciated, even by our regional health authority, which is in some ways conspiring—if that is not too strong a word—with us in our endeavours to get a new building for that admirable hospital. I refer to the fact that all the undergraduate teaching in ophthalmology in the Southampton medical school is carried out by that very small eye hospital. In addition, it does postgraduate work and trains nurses—those specialising and others—in eye care. There is a nurse training school for the ophthalmic nursing diploma and a number of junior doctors are in full-time training.
Therefore, I am discussing not just an ophthalmic department that is part of a general district hospital but something of a higher quality. The consultants at the hospital tell me that, although the equipment is basically satisfactory, their ability to practise the best modern techniques is restricted by the building and its layout. I, like my hon. Friends, have visited the building several times and am fully aware of that.
The hospital's catchment area is primarily Southampton and south-west Hampshire. The present population in our district is 500,000, but there is a projected increase of at least 10 per cent. by the end of the century. Therefore, the population will then be 600,000 or 700,000. In addition, there is at least a 20 per cent. cross-boundary intake of patients.
There is a point about which the region may be a little ambivalent. I am aware that the Southampton eye hospital is probably the premier eye hospital in the region. However, that is not officially recognised by the region. At this late hour I shall not bore the House with the figures, but I could do so if goaded. They show that that hospital is taking the more difficult cases from other districts within the region. In particular. it plays a large part in helping the

Channel Islands with difficult cases. My plea therefore is not just for Southampton and the south-west Hampshire district.
The outpatient clinic of this small hospital has been carrying more than one-third—34 per cent. is the precise figure—of the numbers of clinic patients passing through the more modern general hospital and the Royal South Hants. It has been handling about 59,000 outpatient attendances a year. The casualty department, which is open around the clock, as every good casualty department should be, deals with 30,000 patients a year. That is more than half the number taken by the grander general hospital and the Royal South Hants. I say that not to decry the larger hospitals but to show what a small hospital can handle.
Our plea is simple. The present building is a mixture of Victorian vicarage and some slightly more modern additions. I have known the hospital for 28 years. Superb medicine is practised there, but, however good and dedicated the staff are, there comes a point when the sheer inadequacy of the building must be a restriction on the ability of those in the hospital to practise their high standards of medicine. I shall give an example. The old operating theatre has no anaesthetic room, no recovery ward, no ventilation system and is adjacent to the ward's sluices and toilets. I could give the evidence, but at this late hour I shall not unduly detain the House.
We need a new hospital. The present one cannot be rebuilt on the present site because of the need for continuity. The hospital cannot be closed down for three years while a new one is being built. Therefore, a new site must be found. There are several possibilities. It could be absorbed into either the general hospital or the Roy al South Hants. There is a great deal to be said for retaining the integrity of a specialist hospital such as this. It recognises that is must co-operate with its bigger brethren where there is an overlap, and so the right answer is to locate it near the general hospital where there are other departments —I shall not detain the House be listing them—and where there is an obvious interplay between an eye hospital and other department. The most obvious examples are neurology and neurosurgery. When someone is badly injured on the motorway and has multiple injuries, including eye injuries, there are advantages in having the hospitals close together.
Eye hospitals are almost unique in the number of their patients who go to outpatient clinics. They have fewer patients going into hospital than any other area of medicine. Therefore, I suggest to my hon. Friend that the right answer is to retain the independence of the hospital but to locate it near the general hospital. There are a number of suggestions on how that might be done. I do not wish to say more than that. My hon. Friend the Member for Itchen may wish to say a few more words if he catches your eye, Mr. Deputy Speaker, because the hospital is in his constituency.
There is a broad case in favour of relocating the Southampton eye hospital in a new purpose-built building on a site close to the general hospital while retaining its independence. My submission is supported not only by the staff of the hospital but by the district and the local branch of the British Medical Association.

Mr. Michael Colvin: My hon. Friend has not mentioned one very important person—the ghost. When listing the assets of the


Southampton eye hospital, he must include the ghost. The building was a vicarage and it is very ancient indeed. The ghost is an important asset. What my hon. Friend said about the catchment area of the hospital is important. He did not mention that 75,000 patients go there from around the region. A difficulty that the hospital has found in regard to capital investment is that it has been treated as a district hospital—as a hospital of the Southampton and south-west Hampshire district—when it is not a district hospital; it is in effect a regional hospital and, for investment purposes, should be treated as such.

Sir David Price: I thank my hon. Friend for his intervention. As I said, at least 20 per cent. of patients come from outside the district. But the region has not recognised it as such and part of my submission is that it should be so recognised. If that were the case, I believe that the capital allocation involved would be containable within the regional budget.
As I said when speaking in the debate on the National Health Service last Thursday, unlike counties, regions are not independent authorities. They are creatures of the Department at the Elephant and Castle. They have no independent financial sources, although they have a degree of independence. The Minister would therefore be right to say that this is in effect a regional hospital. It is a referable hospital from other districts within the region, but, again, it is not recognised by the region.
I am aware that within the other districts of the region—my constituency traverses more than one, so I am not speaking only for Southampton; I speak for Winchester too—there is a feeling that the Southampton district has had more than its fair share of the capital allocation. This has arisen because Southampton is a designated district for the teaching hospitals. This is important to the region, but it has, in a way, made other districts feel that Southampton has had more than its fair share. I do not believe that to be the case.
I hope that the case for rebuilding this eye hospital, which in cost-effective terms is one of the most effective hospitals in the country, will be looked at in its own right. I know that the Minister is totally sympathetic to the case I have made and that he will respond with that sympathy and understanding that can come only from somebody from Oxford.

Mr. Christopher Chope: rose——

Mr. Deputy Speaker (Mr. Paul Dean): Do I understand from what the hon. Member for Eastleigh (Sir D. Price) said that he and the Minister are agreeable to the hon. Member for Southampton, Itchen (Mr. Chope) intervening in the debate?

Sir David Price: Yes, Mr. Deputy Speaker.

Mr. Chope: I thank my hon. Friend and the Minister for allowing me to participate in the debate. The eye hospital is in my constituency, although it has a significance which goes far wider.
I was pleased to be able to visit the hospital in August and see for myself the cramped conditions in which a dedicated team of staff must work. They take enormous pride in their work and, although it is tempting on an

occasion such as this to say that the conditions there are terrible, the standard of care being provided for the patients seems to be of the highest order. Our plea tonight is that this should not be taken for granted and exploited in a way that would prevent progress from being made and the new development taking place.
I have with me a copy of the draft 1984 health district plan. Unfortunately, it contains a reference on page 132 to the fact that the eye hospital is unlikely to be redeveloped within the next 10 years. As my hon. Friend the Member for Eastleigh (Sir D. Price) said, a feasibility study is being undertaken by the regional health authority, which is looking at three possible alternative sites, one of which is not owned by the health authority. There is reference in the district plan to the fact that if that turns out to be the preferred site, it may be necessary for the DHSS to make an interim contribution.
The plan states that the results of this appraisal may require the acquisition of land a considerable period in advance of a capital development commencing, which would require approval from the DHSS. I do not know whether that is true, but I hope that it will not be that long before development takes place. I hope also that my hon. Friend the Minister will be able to give some indication that the Department is sympathetic to the redevelopment.
It is worth praying in aid in a debate about the Southampton eye hospital the fact that we are fortunate in Southampton in having a district health authority which is constructive in dealing with its priorities. There is very little bickering on the authority, and its members get down to the business of ensuring that there are value-for-money savings. Efficiency savings are part and parcel of the budget every year. It is the intent of those who work in the authority to ensure that money is available for new revenue developments. That is why I hope that the new eye hospital in my constituency, or in Southampton, will be a reality sooner rather than later.

The Under-Secretary of State for Health and Social Security (Mr. John Patten): I am grateful to my hon. Friend the Member for Eastleigh (Sir D. Price) for raising an issue that is important to him, his constituents and to my hon. Friends the Members for Romsey and Waterside (Mr. Colvin) and Southampton, Itchen (Mr. Chope), whose voices have also been heard during the debate. I am especially glad to have heard the voice of my hon. Friend the Member for Itchen. I missed his maiden speech, which I understand was formidable. I am glad that I now have evidence of his formidable debating powers.
The main issue that my hon. Friend the Member for Eastleigh has chosen to raise is the need for a new eye hospital. As he undoubtedly knows, the Department has had the views of consultants drawn to its attention, notably by my hon. Friend the Member for Southampton, Test (Mr. Hill), who forwarded a letter to us in July from one of the distinguished consultants at the hospital, Mr. M. J. Absolon. I am grateful for that letter and the information that it gave. However, I am much more grateful for the full additional information that my hon. Friend the Member for Eastleigh has provided tonight along with the local flavour. I am sure that his constituents and those of my other hon. Friends are grateful for the interest that their Members of Parliament are all showing in the fate of the hospital.
The provision of such a new facility has long been recognised as desirable in Southampton. That is recognised in Southampton and at the Elephant and Castle. However, it is sometimes difficult to turn recognition into reality. I shall set out some of the background to the difficulties that the district health authority, the regional health authority and the DHSS find themselves in because of the present economic and financial climate, which means that it is not possible for us to proceed as fast as we would wish with many of the things which seem desirable. However, I remind my hon. Friends—I dare say that they do not need reminding—that a record number of hospitals is being built and designed. The number is greater than at any other period since the inception of the NHS. My remarks tonight should be set against that background.
Unfortunately, there are competing priorities for limited resources and difficult choices have to be made. I am sure that my hon. Friends regret that last week the Leader of the Opposition, the right hon. Member for Islwyn (Mr. Kinnock), failed in his speech on the NHS to give any clear recognition to the fact that there will always be competing priorities in the NHS, as that distinguished predecessor of his, Mr. Richard Crossman, observed so often when he was the Secretary of State for Social Services. My hon. Friend the Member for Eastleigh made a notable contribution to the debate on Thursday. It can happily be said that it is recognised by many who occupy the Opposition Benches, although they are untenanted tonight, that there is a need to replace old and unsuitable buildings.
The DHSS recognises that the Wessex regional health authority is significantly more deprived than most regional health authorities. We have long recognised this, and we are striving, as we have done for many years, to put this right. In recognition of this fact, Wessex has been receiving a higher share of the national annual capital sum. This means that in recent years there has been an extensive capital programme, the majority of which has been concentrated in Southampton, which I am sure my hon. Friend would be the first to recognise.
From 1974 to 1981 about 40 per cent. of the total capital spent by the regional health authority in the whole of this very large region was spent in Southampton. Over the next 10 years, Southampton can expect to receive 9 or 10 per cent. of Wessex's capital allocation. Much of that is committed to the Royal South Hants hospital which, of course, provides a maginificient service in the area.

Mr. Colvin: And teaching.

Mr. Patten: I am glad that my hon. Friend the Member for Romsey and Waterside has intervened. When I was in my previous accommodation at Stormont castle, I thought of the waterside as being somewhere in Londonderry. I must now think of it as being located on the south coast.
The district health authorities find themselves in a difficult position. They recognise—I believe that they have stated it publicly—that this new eye hospital is at the top of their priority list for service development in the district. They must consider that priority against other competing priorities. Undoubtedly I am only telling my hon. Friend the Member for Eastleigh that which he already knows, but the need to improve non-acute services for the elderly the mentally ill and mentally handicapped —the priorities groups—to whom we try to give greater

attention is as pressing in that area as it is in my constituency and in other districts. The districts do not have an especially easy task.

Sir David Price: My hon. Friend is right in talking about the needs of the elderly. One of the problems with using the present building as an eye hospital is that it is inadequate for the elderly. As my hon. Friend knows, I am especially interested in the disabled, and some of the elderly tend to be disabled. For example, the lavatories are wholly unsuited for anyone in a wheelchair.

Mr. Patten: I take my hon. Friend's point. I would not seek to disagree with him for one moment. We all know of his long-standing interest in the problems of the disabled. I have not visited the hospital. I do not know it at first hand, but I have heard such graphic descriptions of the conditions that I almost feel that I have seen it.
In recent years, the district health authority' s capital development programme has been dominated by the major programme of work which was initially planned in the 1960s to provide facilities to enable Southampton to fulfil its functions as Wessex's teaching facility, and obviously Southampton benefits considerably.
As my hon. Friend the Member for Romsey and Waterside pointed out, this hospital, like other hospitals in Southampton, provides valuable services to the whole region. The decision to designate Southampton as a teaching district meant that the acute hospital services development programme had in the first instance to reflect the priorities of the medical school. Certainly, the Southampton general hospital was at one stage identified as the firm location for the major development of student and clinical accommodation, including possibly a eye hospital. Replacement accommodation for the eye hospital was to be provided within the development programme.
Current clinical views are not as clear. Clinical views are not always consistent. From my short period at the DHSS I have found that we do not always get unanimity of views from senior and distinguished clinicians. I am advised that current clinical views have questioned the suitability of the original location and have suggested up to three locations. Of course, the district health authority is the authority that is enjoined with the job of deciding local priorities. I should not want to take issue with my hon. Friend on any issue, but I might always take issue with him on the suggestion that regional health authorities are our creatures. Sometimes, as I look around the country, I wish that they were our creatures. We have a system of 14 regional health authorities and 192 district health authorities which are enjoying spending formidable sums on hospital and community services. In the first instance it is up to them.
It must be a matter of pleasure to my hon. Friend the Member for Eastleigh to realise that the district health authority and the Wessex regional health authority recognise the need to replace the eye hospital. It remains for the district health authority to accord it the priority that it feels right within its annual district plan, and, in the light of that, to discuss with the regional health authority the question when necessary capital to commence this desirable plan can be made available from the not inconsiderable sums of money available to the region.
I understand that there are feasibility studies for three possible sites. There may be more. There may be different ways of helping the rebuilding of the hospital. The


regional health authority will take into consideration the views put forward by the ophthalmic consultants and others about the relevant merits of the different sites. When one has heard two such measured but impassioned pleas it is difficult to put the other side of the case. There are, happily from our point of view, many of our hon. Friends in other parts of the Wessex regional health authority area and other right hon. and hon. Friends who wish to see capital schemes developed there. They look, not with jealousy but with a slightly jaundiced eye, when large and expensive capital developments are concentrated in one place.
We all know that with high technology medicine such concentrations are often necessary, particularly to provide the splendid teaching facilities that we see in Southampton. At the same time, it has to be recognised that the region and the DHSS must consider the spread of service developments throughout Wessex.
Some districts have had to wait a long time in the queue while a substantial number of developments have been concentrated in Southampton. That is not to say that I am not completely sympathetic to the case raised by my hon. Friend, which has attracted such interest. Nonetheless, it is incumbent upon me as a Minister to mention the competing needs in other parts of the region.
I hope that my hon. Friend will accept assurances from me that the regional health authority and the district health authority will, as they have advised me, provide as soon as possible for the building and replacement of this hospital, which is recognised by all as desirable. My only regret is that I cannot give my hon. Friend firmer news, which is what I would have wished to be able to do.

Question put and agreed to.

Adjourned accordingly at three minutes to Twelve o'clock.